South Africa’s Department of Trade, Industry and Competition (DTIC) has announced that the South African government and all stakeholders in the industry have signed “The South African Steel and Metal Fabrication Master Plan 1.0”, which aims to improve the long-term sustainability of the industry, guiding the stabilization and progress of the industry. The plan includes a ZAR 1.5 billion ($108.9 million) downstream steel development fund that was established by the government through the Industrial Development Corporation.
“The key medium-term goal is to match supply to demand: there is over-capacity in basic long steel commodity products, but no supply of many of the steels which are required by the auto industry, the mines and the mining and yellow metal equipment sectors,” the DTIC said in the master plan.
According to the plan, the establishment of a steel industry development fund to support critical industry projects is proposed, with funding sourced from a small levy on all primary steel sold in South Africa. Moreover, “Industry consolidation may be necessary along certain parts of the value chain. A targeted designation by the minister [minister of Trade, Industry and Competition] under the Competition Act is proposed, which would enable discussions between industry stakeholders to help manage consolidation. Some consolidation is likely to take place simply as a result of market forces, but that may lead to further de-industrialization and a discussion of options is preferable,” the plan stated.
Meanwhile, the government has approved an export tax on scrap metal and other measures to help ensure the supply of affordable scrap metal to the domestic consuming industry. In addition, “discussions between government and scrap dealers and consumers of scrap have been held to consider measures which can drive local beneficiation of scrap, while supporting the sustainability of the recycling industry. There should be an incentive for recyclers to beneficiate scrap further up the value chain than by simply melting it into ingots or billets for immediate export,” the DTIC said.