JOHANNESBURG - Government policies including price preference systems and export taxes are being blamed for the collapse of South Africa's long-steel industry.
This is according to Dr. Azar Jammine, Director and Chief Economist at Econometrix who pointed out that South Africa’s steel exports have plummeted by 90% since 2006 due to declining production.
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He added that the situation worsened after 2013 when the government introduced a preferential pricing system aimed at deliberately suppressing the cost of scrap metal.
“This was done to support small-scale steel production, but in the long run, it has negatively impacted the broader steel industry,” Jammine said.
He was reacting ahead of the closure of ArcelorMittal's long-steel operations in Newcastle and Vereeniging.
Among some of the challenges that have plagued the company include long-steel production, uncertain electricity and transport supplies and increased costs.