South Africa’s proposed steel tariff increases have put small manufacturers and fabricators at the centre of a debate over how to protect local steel production without increasing costs for businesses that depend on steel as an input.
The International Trade Administration Commission of South Africa (ITAC) has proposed higher duties on a range of steel and metal products, alongside import controls and rebates for products that are not manufactured locally.
The second phase of the review attracted 109 written submissions from industry stakeholders, with ITAC publishing its preliminary findings on September 18 and allowing four weeks for public comment.
Among the products covered are nails, tacks, drawing pins and corrugated nails, as well as certain wire, ropes and cables, screws, bolts, tubes and flat-rolled steel products.
The proposed duty on certain screws, bolts, nuts, rivets, cotters, cotter pins and washers would increase from 10% to 30%, while certain stainless-steel flat-rolled products would rise from zero to 10%. Duties on nails and related products would increase from 10% to 15%.
Small businesses caught in the middle
The consultation process has highlighted the different interests across the steel value chain.
Downstream businesses including Renlaw Sharpening & Engineering, Unique Ventilation & Support Systems and Tradecore Strut Africa raised objections to some proposed tariff increases, citing concerns around the availability and specifications of locally produced steel.
AMC Cookware director Ryna Cox has also raised concerns about the impact of steel tariffs on smaller downstream businesses.
“Big companies with 3 000 employees or so have lawyers and teams of people that produce fascinating documentation, but we’re a small downstream company,” Cox said.
The concerns are significant because many smaller manufacturers buy steel before cutting, bending, welding or processing it into finished products.
ITAC chief commissioner Ayabonga Cawe has acknowledged the tension between protecting primary steel producers and keeping inputs available to downstream businesses.
“We don’t want to unnecessarily burden downstream fabricators,” Cawe said.
ITAC has therefore proposed rebate provisions for products that are not manufactured locally, allowing qualifying businesses to import certain inputs without paying the higher duty.
Steel does not end at the mill
The debate matters to SMMEs because the steel industry extends far beyond primary steel production.
According to InvestSA, a large number of South African businesses convert semi-finished steel into finished products, including sheets, plates, strips, coils, bars, rods, tubes, pipes, hollow profiles and structural sections.
The government investment agency estimates that the steel sector represents about 1.5% of South Africa’s GDP and supports about 190,000 jobs.
More than 85% of locally produced steel is consumed by industries where steel is an input rather than the final product, highlighting the importance of downstream manufacturers and fabricators to the broader economy.
InvestSA estimates that every 1,000 tonnes of locally produced steel adds R9.2m to GDP, supports three direct and three indirect jobs and generates R5.3m in domestic procurement spending, including R500,000 with SMMEs.
The Steel and Engineering Industries Federation of Southern Africa (SEIFSA), which represents more than 1,300 companies across the metals and engineering value chain, including smaller enterprises, says the sector remains under pressure.
SEIFSA CEO Tafadzwa Chibanguza said the metals and engineering sector’s production declined by 1.6% in 2025, following a 1.4% decline in 2024, while employment fell by 0.43%.
“Overall, we are emerging from a multi-decade downturn reflected across production, employment and capacity utilisation indicators,” Chibanguza said.
He said insufficient demand remained a central structural constraint.
“The production capacity exists, but the weak economic environment means that there is no demand,” Chibanguza said.
Steel producers seek protection
While downstream businesses have raised concerns about input costs, domestic steel producers and industry stakeholders have argued for stronger protection against low-priced imports.
ITAC’s review records support for higher duties from industry players including ArcelorMittal South Africa, Safal, Scaw and Columbus Stainless.
The commission has linked the pressure on local producers to global steel overcapacity, rising imports, weak domestic demand and high energy and logistics costs.
Cawe described the steel industry as facing an “emergency situation”, saying low-priced imports and global overcapacity were placing significant strain on domestic production.
South Africa produced about 9.5 million tonnes of crude steel in 2004, but Cawe said production had fallen to less than half of that level two decades later.
However, for small manufacturers, the question is whether tariff protection can revive local steel production while keeping the inputs needed by downstream businesses accessible.
“Yes, tariffs alone are a blunt instrument. But you’ve got to see this as a symphony of instruments,” Cawe said.
