According to ArcelorMittal, long steel production is to cease by the end of the month, with reaming operations to stop by the end of the first quarter.

“We had hoped that matters would not have come to this conclusion, at a time when our country can ill-afford job losses and the further erosion of industrial capacity,” said chief executive officer Kobus Verster.

The company said a weak steel market, combined with persistently high logistics and energy cost and insufficient public policy to address surging low-cost steel imports, particularly from China, all contributed to the decision.
The wind down affects all of ArcelorMittal South Africa’s long steel plants, including the Newcastle Works, Vereeniging Works, and rail and structures subsidiary AMRAS.

Newcastle’s cokemaking operations will continue, though scaled back to reflect reduced demand. The company said it is confident that its remaining South African flat-rolled operations can be successfully restructured to be competitive, sustainable and profitable.

“The company going forward will be focused on re-establishing ArcelorMittal South Africa as the champion of innovative, export-driven, steel-based industrialization in South Africa, for Sub-Saharan Africa and other key geographies, by building on the existing competitive supply chain and ensuring the continued growth and competitiveness of core downstream industries such as automotive, renewable energy, mining, and key construction and infrastructure projects,” it said.