A brighter future for South African steel?
South Africa's steel sector stands at an inflection point. After years of stagnation and brutal trading conditions hampered by power outages, logistics bottlenecks and cheap imports, demand for steel is poised to recover.
Public investment surge will fuel demand. National Treasury's 2025 budget earmarks over R1 trillion in infrastructure investment through to 2028, spanning transport, energy, water and sanitation. Additionally, the recently announced World Bank $1.5 billion loan is dedicated to upgrading transport and energy infrastructure.
This loan addresses grid and logistics deficiencies that have historically constrained steel use. Additionally, the US$500 million World Bank guarantee is designed to direct private investment into electricity transmission, supporting Eskom's grid expansion and underpinning steel-intensive activity.
These combined investments promise robust demand for steel, particularly rails, pylons, transformers and transmission infrastructure.
ALSO READ: ArcelorMittal warns it might close without urgent solution to challenges
SOE roll-out and renewables drive will increase uptake
The SOE roll-out and renewables drive, which will increase steel uptake, has begun. The Eskom grid build-out, confirmed in June 2025, relates to 5 GW repowering projects and long-delayed transmission upgrades, and will hinge on local steel supply for pylons and infrastructure.
The Transnet and South African National Roads Agency pipelines include rail and port expansions totalling R47 billion, further igniting demand for rails, sleepers and fastener components. The renewable energy boom requires extensive steel infrastructure—frames, towers, pylons—all expected to be sourced locally in line with industrial policy objectives.
Resurgent private sector, manufacturing and mining is likely to result from renewed manufacturing activity. With stable power and logistics, sectors from auto to appliance manufacturing will increasingly show output recovery, translating into increased demand for flat and long steel products.
Mining sector improvement is slowly gathering momentum. Coal and other mineral transport require steel-intensive conveyance and loading infrastructure—already increasing modestly, with potential growth ahead.
ALSO READ: ArcelorMittal hauls Transnet to Competition Tribunal for market abuse
Also growth in African steel demand
African continental growth steel demand is also expanding. Africa's steel market reached approximately 39.5 million tonnes in 2024 and is projected to expand at ~3.1% CAGR through 2034. South Africa can leverage rising demand across manufacturing and construction markets continent-wide, especially under AfCFTA.
Given the infrastructure investment pipeline, further steel-demand growth of 5–7% annually is realistic – outpacing GDP growth. Ultimately, we anticipate seeing a level of palpable demand not seen for some time.
Improvements to local sourcing policies can ensure public and private projects use South African steel, reducing imports through localisation and designation, especially for SOEs and government departments and strengthening local steel capacity utilisation will have a solid effect.
Stable order pipelines could grow substantially. SOEs alone could generate tens of billions annually in repeat steel demand, providing much-needed predictability and scale. Steel is the linchpin of multiple value chains, from transformers and rails to agricultural equipment.
ALSO READ: Warning from industry that Steel Master Plan has stalled
Robust demand will revitalise sectors and support thousands of jobs
Robust steel demand revitalises sectors and supports thousands of jobs downstream, and consequently, a multiplier effect can be expected once policy supports local demand strongly. Importantly, reliance on imported steel introduces supply risk and volatility. A strong local industry ensures South Africa remains resilient amid global disruptions.
The question is not whether steel demand will grow, but how effectively we ensure that this growth benefits domestic producers and fosters sustained industrial development. In the coming months, policymakers and industry leaders must align demand signals with supply capacity, thus creating a virtuous cycle of investment, production, and socio-economic returns.
Steel isn't just a commodity; it is the concrete evidence of a nation building itself, bridge by bridge, pylon by pylon, job by job.
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