Africa’s Steel Boom Signals Major Growth for Recycled Steel Trade, but Policy Barriers and Investment Risks Persist

- Rising steel demand: African steel demand is expected to grow by around 4.4% in 2026. The continent produced 19 million tonnes of steel in the first nine months of 2026, nearly 10% higher than a year earlier.

- Significant growth potential: Africa’s young population, expanding infrastructure needs and low per-capita steel production of just 24 kg, compared with 284 kg in Europe, are expected to drive future steel consumption and scrap generation.

- Four distinct regional markets: Experts stressed that Africa is not a single market. North, West, East and Southern Africa have different steel industries, trading patterns and business opportunities.

- South Africa’s restrictive policies: A domestic scrap price-preference system and a 20% export duty are intended to keep locally produced steel competitive. However, these measures have reportedly suppressed scrap prices, discouraged collection, reduced employment and weakened recycling-sector investment.

- Infrastructure and logistics challenges: High transport costs, limited port access, financing constraints, payment risks and regulatory uncertainty are major barriers to developing the recycling industry.

- EU waste shipment restrictions: Proposed restrictions under the EU’s updated Waste Shipment Regulation could affect recycled-metal imports into Egypt and Morocco, potentially redirecting trade towards suppliers in the US and UK.

- Foreign investment risks: Political instability, corruption and unpredictable regulations remain concerns for international investors considering long-term investments in African markets.

- Scrap imports increasing: Several African countries have shifted from being exporters to net importers of recycled steel. Nigeria’s imported scrap growth was reported at 300% in one year, indicating rapidly changing trade dynamics.

[ABS News Service/28.10.2026]

The great potential of Africa for steel production and secondary raw materials took centre-stage at the Bureau of International Recycling’s World Recycling Convention in Malaga, Spain.

The Ferrous Division devoted the entire plenary session to the continent on 27 October with industry experts setting out the current market position, likely growth in the coming decades and some of the pitfalls.

Division President Shane Mellor (Mellor Metals, UK) said Africa was a continent with a rapidly evolving steel industry, offering opportunities and challenges for the recycling sector.

“When we talk about Africa, we are not talking about one single market. Some countries already have established steelmaking and recycling industries. Others are only beginning to develop them.”

African steel demand is expected to grow by around 4.4% in 2026, against a much weaker global picture. According to the World Steel Association, Africa produced 19 million tonnes of steel in the first nine months of 2026, up nearly 10% on the year before.

“For our industry, that presents opportunities not only to supply recycled steel, but also to develop the collection, sorting, processing and trading infrastructure that will be needed to support future growth,” said Mr Mellor. “There are also practical challenges around ports, transport, access to finance, payment terms, material specifications and, of course, regulation.”

Different markets

Sanjay Mehta, Director, MTC Group (IND) and president of the Material Recycling Association of India, agreed it would be a mistake to consider Africa as a single entity. He preferred to divide it up into north, west, east and south regions, saying: “Everything depends on where in Africa you look: four different markets; four different strategies.”

Crude steel production is dominated by Egypt, Algeria, South Africa and, to a lesser extent, Morocco and Libya. Mr Mehta looked to the future with Africa home to one-in-five of the world’s population, 60% of whom are under 25 years of age.

“This is a young, dense building continent – not rich today but on the verge,” he said. He argued major infrastructure would be needed in the next two decades and the current African total of only 24kg of steel produced per capita could only increase. In Europe the figure is 284kg.

“This number can only go up and in 20 years that steel becomes scrap. Today’s low consumption is tomorrow’s arisings for our industry to use.”

Low-price policies

The South African steel sector was considered by another speaker, Donald MacKay, chief executive officer of XA Global Trade Advisors (ZAF). In South Africa, he said, the price of recycled steel is suppressed through two policy mechanisms.

“One is called the price preference system which says, if I have scrap, I have to sell it at a discount locally before I can get a permit to export,” he explained. “Only if nobody buys it locally can I export. Then, if I want to export steel, they'll add another 20% export duty.”

Mr MacKay said the 14-year-old strategy is intended to keep the price of newly produced steel artificially low and more competitive. Eighteen months earlier, he recalled, South African long steel products were even cheaper than China’s.

“That creates some interesting issues. For example, it's difficult to grow imports because why would you want to sell products into that market which is artificially cheap?

“It also creates a position where the mini-mills who are consuming the steel, spend all their time lobbying Government for additional measures to stop the outflow. At the same time, when the price of steel scrap drops, people are collecting less and that creates even more pressure on the mini-mills.”

Other challenges were pointed out by panellist Quintin Starkey, chair of the Metal Recyclers of South Africa, who explained that consumers were concentrated inland in the Johannesburg region. A recycler in a coastal region faced additional freight costs so collecting recycled steel was no longer economically viable.

“With that uncertainty in the markets, you've seen disinvestment in the industry,” he said. “We have gone from employment figures of 15,000 down to 9,000 and we're seeing a continued shrinkage in participants in the market.” Mr Starkey believes the price preference regime is creating long-term effects for the sustainability and the viability of the local recycling industry.

“It's very important that not only Africa, but the rest of Europe and the World take note of what has happened in these countries and learn from it. Policy is good but it needs to be thought-out policy, taking into consideration the entire value chain, not just a transfer of wealth from one industry to another.”

The current capacities of the four leading north African countries were set out by Atilla Widnell, managing director of Navigate Commodities (SGP). He also spoke about the implications of the EU’s update of the Waste Shipment Regulation.

Egypt and Morocco, both net importers of recycled steel, are on a proposed list of non-OECD countries that will no longer be able to import recovered metals. Mr Widnell said the ban would most obviously affect ferrous trade and, if carried out, could more directly affect smaller “box” traders. “Obviously, that means that there's probably likely to be less direct consumer trade. In Egypt and Morocco's case, it would probably mean less trade with some European suppliers, but then they could go to the US and the UK.”

“Keep your eyes open”

An essential requirement for growth in African steel production and recycled steel trading will be funding and panellist Tom Bird, Executive Chairman, Enicor (GBR), was asked what he thought might be holding back foreign investment.

Citing difficult personal experiences of commercial deals in Algeria and Nigeria, he warned of political instability, regulatory uncertainty and – “the elephant in the room” – corruption.

“Trading is one thing”, he conceded, “but putting hard dollars or euros into investment there is an entirely different matter. It takes careful preparation, understanding of local conditions and a realistic assessment of the political and commercial risks involved. If you decide to go into Africa, keep your eyes wide open.”

Abhijeet Mahanta, Director, Stelaris Resources (CHE) chaired the panel discussion and congratulated BIR “for putting Africa on the map”.

“Over the last five or six years, the whole trade dynamics [for recycled steel] in Africa has changed. From about 15-18 exporting countries, now most of Africa has turned into net importers. And even though currently they are not very big volumes, Nigeria’s growth of imported scrap has gone up 300% in one year.

“So that is quite significant. The consumption of imported scrap, imported recycled steel into Africa is definitely going to go up.”