Clock Ticking for ArcelorMittal’s Long Steel Unit as Shutdown Looms

Job losses, idle furnaces and policy indecision: Can South Africa save its steel backbone?

South Africa’s steel sector is bracing for another blow. ArcelorMittal South Africa (Amsa), the country’s largest steel producer, has warned that its long steel business, the division producing construction-critical steel for beams, bars, and rods, could begin a full wind-down before the end of September 2025 if no lifeline is secured.

In a trading statement posted to the JSE’s Stock Exchange News Service (SENS) on Monday, Amsa made it clear: time is running out.

“The company does not have the ability to bear any further financial risk associated with its continued operations after the deferral period,” Amsa stated.

Imports and Rail Chaos Are Breaking the Backbone

The steel giant’s statement highlights a perfect storm of structural failures. Cheap steel imports, mainly from China, Vietnam, and Indonesia, continue to flood South Africa’s market, undercutting local prices. Meanwhile, Transnet’s rail service, once the artery of the industrial economy, has “deteriorated to its lowest levels ever,” the company said.

The result? Higher costs, uncertain deliveries, and a shrinking market share for domestic producers.

Amsa said that its own sales volumes for the first half of 2025 dropped by 10% compared to the same period last year, with average steel prices falling more than 5% , driven partly by a stronger rand.

R1.7 Billion Lifeline Bought Time, Not a Solution

In March, Amsa pushed back the planned shutdown after securing a R1.7 billion loan from the Industrial Development Corporation (IDC), along with Temporary Employee Relief Scheme (TERS) support to help cover workers’ wages. But those funds were never meant to be a long-term fix, just breathing room.

Since then, Amsa says it’s been working with the IDC and government to find a viable path forward, but with little to show for it. The company stressed that despite “significant effort,” progress remains slow and options are drying up.

Operations will continue until 30 September 2025, to allow the company to honour existing orders. But beyond that, the writing may be on the wall.

Steel Industry or Steep Decline? A Call to Action

This isn’t just a corporate issue, it’s a national dilemma. The long steel division is critical to South Africa’s infrastructure and construction sector, from roads to housing to commercial buildings. Its collapse could trigger thousands of job losses and deepen the decline of local manufacturing.

“Countries around the world have stepped up to protect their steel industries with tariffs and localisation policies,” Amsa noted in its statement. “We urge the South African government to do the same.”

But the industry has long complained of policy paralysis, from delayed infrastructure spend to inconsistent enforcement of import duties leaving local players vulnerable.

Social Media, Market Jitters, and Political Pressure

On social media, reactions to Amsa’s warning were mixed. Some users voiced frustration over the government’s slow response, while others questioned whether the company had done enough to modernise or adapt.

“How many more warning signs do we need before steel jobs are gone for good?” one user posted on X (formerly Twitter).
“Why do we always find out at the last minute?” asked another.

On the markets, Amsa’s share price fell almost 8% on Monday, a sign that investors are beginning to lose patience.

Results and Reckonings

While Amsa does expect a slight improvement in losses, forecasting a smaller headline loss per share (between 82c and 93c) compared to R1.09 last year, it’s cold comfort.

The company is due to release its official financial results on 31 July, and all eyes will be on whether any new progress has been made to salvage the division.

For now, South Africa’s steel industry finds itself in a familiar place: waiting for policy, praying for rail, and holding its breath.

{Source: Moneyweb}

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