Amsa signals long steel shutdown risk as support falls short

Struggling JSE-listed steel producer ArcelorMittal South Africa (Amsa) has warned that without a viable solution to its long steel business, it will be forced to begin winding down operations before 30 September 2025.

In a voluntary trading statement issued on Sens on Monday, the company expressed concern over the lack of progress in resolving “structural impediments” threatening the viability of the division.

Read: ArcelorMittal hauls Transnet to Competition Tribunal for market abuse

“Regrettably, limited progress has been made to date in redressing the major structural impediments. High imports continue to flood into the domestic market,” it said.

“Transnet’s rail performance deteriorated to its lowest levels ever, resulting in significantly elevated operating risk and unaffordable additional cost being borne by the company,” Amsa added.

In March, Amsa postponed its planned closure of the long steel business after securing a R1.7 billion loan facility from the Industrial Development Corporation (IDC), following pressure from government and customers. It also received support through the Temporary Employee Relief Scheme (Ters) to help fund employee costs.

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During this “deferral period”, the company has been exploring strategic alternatives, while the IDC continues its due diligence. Government has also been working on structural interventions, although Amsa said the process is still ongoing.

“Significant effort has been given to this exercise, which remains ongoing,” it said.

Amsa stressed that the continued operation of its long steel division depends on further financial assistance.

“[The] company does not have the ability to bear any further financial risk associated with its continued operations after the deferral period.”

Operations will continue until the end of September to honour customer commitments.

Read: As ArcelorMittal stumbles, government embarks on largest ever review of steel duties

Amsa expects a small improvement in earnings per share – from a loss of R1.09 in the prior period to a loss in the range of R0.82 to R0.93 per share for the six months ended 30 June 2025.

Results will be released on Thursday, 31 July.

Trading conditions

Sales volumes for the first half of 2025 are expected to be 10% lower than the same period last year, due to weaker demand. Net realised prices in rand terms are projected to be more than 5% lower, partly because of a stronger rand-dollar exchange rate.

Amsa highlighted ongoing challenges facing the South African steel and manufacturing industry, including rising imports – particularly from China, Indonesia and Vietnam – structural demand weaknesses, inconsistent policy implementation, rising electricity costs, and deteriorating rail performance.

The group called on government to support the domestic steel industry, noting that countries worldwide have introduced protective measures such as tariffs and localisation policies.

Read: Steel mogul Mittal, SA ministers meet on mill closures

Amsa’s share price

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