State of the Stainless Steel Nation

South Africa’s stainless steel industry is at a critical juncture. After years of deindustrialisation, rising
imports and constrained domestic demand, renewed calls for reindustrialisation have sharpened focus
on rebuilding local capacity. In this latest State of the Stainless Steel Nation feature, Sassda Executive Director Michel Basson outlines the challenges facing the value chain, from policy gaps to structural barriers, while highlighting the sector’s resilience. With the right investment, enforcement and incentives, he believes the industry can become a significant international force…

How would you characterise the current state of South Africa’s stainless steel industry in the context of renewed calls for reindustrialisation? Are we seeing tangible progress in rebuilding local manufacturing capacity?

Over the past two decades, the South African economy has experienced a decline in manufacturing capacity and competitiveness across virtually all sectors. It is well known that the South African metals and engineering sector is facing a crisis of historic proportions, as years of low capital expenditure, declining demand and policy gaps have accelerated deindustrialisation, eroding the country’s productive base.

Upstream, AMSA has retrenched nearly half of its local workforce, with destructive effects influencing job security for more than 293 000 people in the downstream value chain, according to Seifsa. In the stainless steel sector, the industry has experienced a similar negative trend, with small and medium enterprises finding it increasingly difficult to survive.

This is concerning, as the real value add in the supply chain takes place through conversion in these companies. This is also where the core of job creation lies. Industry stakeholders do not believe that current government policies are aligned with industrial priorities and that policies should be redesigned to place emphasis on protecting the local manufacturing sector.

Import regulations, including duties, should be properly enforced to prevent the dumping of low-quality and subsidised products in South Africa. In  many cases, adequate rules are in place, but they are not being enforced.

At the same time, a structured national approach to penetrate and capture African markets should be driven jointly by the private sector and government. This would create increased demand for South African products, resulting in higher volumes that can improve global competitiveness. Many in the industry believe that specific and targeted incentives should be introduced to support manufacturing in particular sectors. This would
encourage competitiveness through investment in technology, skills and capital.

What does “localisation” realistically mean for the stainless steel value chain in 2026? Where are we genuinely strengthening domestic production and where do gaps remain?

The responsibility for localisation does not rest solely with government. Partnerships between government, industry and labour are essential to rebuild the industry and restore competitiveness to global levels. Retailers can strengthen their commitment to local products, and government can support this through local content regulations, procurement incentives and a “Buy South Africa” campaign.

In the stainless steel value chain, approximately 10 000 tons of finished stainless steel goods are imported into the country. Many of these products could be localised.

A significant portion of these imports, such as sinks and hollowware, compete directly with local manufacturers and, in many cases, consists of low-quality dumped products.

The imported 10 000 tons equate to the potential creation of up to 30 000 direct and indirect jobs across the value chain. This is significant.

How is the broader steel sector, including recent developments at AMSA, influencing confidence and stability in the stainless steel market? What ripple effects are fabricators and downstream manufacturers experiencing?

ACTOM CEO Mervyn Naidoo recently stated that deindustrialisation has a cascading effect on society. Job losses in the metals and engineering sector have a ripple effect on supporting value chains, including suppliers, service providers and local economies.

There is also a social component that is sometimes neglected; meaning that communities built around industrial hubs are affected through lower living standards and weakened social cohesion as inequality grows.

There is growing cooperation between different industry sectors to align strategies and continue collective advocacy across all fronts, including government. This is no longer about the survival of a single value chain, but about the industrial and economic survival of South Africa and its workers.

Is South Africa doing enough to protect and stimulate local stainless steel manufacturing? How effective have policy tools such as import tariffs, designation, or infrastructure spend been?

Reindustrialisation cannot be achieved by government or industry alone. Strategic partnerships between government, industry and labour are essential to halt industrial decline, rebuild competitiveness, grow demand, and protect and support local manufacturing. This will create jobs and promote social inclusion by addressing inequality.

As mentioned earlier, government enforcement of existing measures can be improved. Many countries have used infrastructure spending to  maximise industrialisation and job creation. South Africa needs policies that not only announce infrastructure projects at the State of the Nation Address but ensure tangible capital expenditure and localisation in implementation. Industry is ready to work with government in this regard.

Which sectors present the strongest opportunities for locally manufactured stainless steel products? Can infrastructure, energy, water, rail or food processing realistically anchor a new phase of industrial growth?

All of these infrastructure sectors offer potential growth in local consumption of stainless steel. Stainless steel has the advantage of being uniquely suited for food processing, pharmaceutical and certain specialised industrial applications.

If government infrastructure plans translate into tangible projects with effective local content requirements, the industry will be stimulated. This is a strong starting point. However, in a slow-growing economy, it is important to create demand beyond that generated by domestic economic growth alone.

As manufacturing capacity grows through local infrastructure development, the industry should also look north to African neighbours, where infrastructure projects are expanding.

What structural barriers continue to hold back reindustrialisation in the stainless steel sector?

Consider electricity costs, logistics, skills shortages, access to finance and regulatory uncertainty. Structural barriers include ineffective policy implementation, high energy costs, a slow-growing economy, lack of investment, low local demand and the ongoing effects of deindustrialisation.

How competitive is locally produced stainless steel compared to imported alternatives? Are price pressures undermining domestic manufacturers, or is there a growing preference for quality and traceability?

The South African stainless steel sector is globally competitive. This is particularly notable given the limited government export incentives, the distance from European and North American markets, and the influx of cheap dumped products.

The local industry has the capacity, innovation, skills and determination to compete globally, provided it is given a fair opportunity. This has been demonstrated by numerous international stainless steel projects serviced by South African companies.

With structural constraints removed and the appropriate level of investment and incentives in place, the South African stainless steel industry can become a significant international force.

Looking ahead five years, what must happen for South Africa to build a resilient, globally competitive stainless steel industry? What role should government, primary steel producers, fabricators and industry bodies play?

This must be a collective effort. In the stainless steel industry, a strategic process has begun with stakeholder consultation across the value chain to determine the gap between the current position and where the industry would like to be in 2030.

The definition of the ideal 2030 may differ depending on one’s position in the value chain. It is therefore important that the views of all parts of the value chain are considered before specific strategies are finalised. This process began in January 2026 under the auspices of Sassda as the industry
representative body.

Even at this early stage, it is apparent that certain structural and macroeconomic issues must be addressed through engagement with government. However, industry cannot wait for slow parliamentary processes and must work proactively to ensure higher levels of protection and support for local manufacturers.

At the same time, demand for South African stainless steel products and services should be stimulated by identifying new opportunities in export markets. This will be the role and focus of Sassda over the next 12 months.