FerroGlobe Resources Group Business Plan › Section 3 › Industry Analysis & Market Context

3.1 Global Steel Industry Snapshot

World crude steel production reached approximately 1.85 billion
tonnes in 2025, according to the World Steel Association. Asia continues
to dominate, accounting for ~76% of global production, with China
producing roughly 1.0 billion tonnes annually. Africa’s contribution
remains modest at approximately 23 million tonnes (1.2% of global),
against demand of ~40 Mt — a structural deficit that defines the FGRG
opportunity.

Figure 3.1

3.2 Industry Drivers

Demand-side drivers

• Urbanisation: Africa’s urban population is projected to double
  from approximately 600 million today to over 1.2 billion by 2050,
  driving sustained construction-led steel demand.
• Infrastructure investment: Major continental programmes —
  including the African Continental Free Trade Area (AfCFTA), Programme
  for Infrastructure Development in Africa (PIDA), and South Africa’s
  National Development Plan — anchor a multi-decade demand base.
• Energy transition: Renewable-energy build-out (wind towers, solar
  mounting, transmission) is creating new steel demand segments at premium
  margins.
• Mining capex: Copper, cobalt, lithium and rare-earth mining
  expansion across the DRC, Zambia, Botswana and South Africa requires
  steel-intensive plant and infrastructure.
• Automotive localisation: South Africa’s automotive masterplan
  targets 1.4 million units annual production by 2035, driving demand for
  advanced high-strength steel.

Supply-side drivers

• Capacity rationalisation in legacy producers: ArcelorMittal South
  Africa’s wind-down of Longs Business (2025) is the most significant
  capacity withdrawal in 30 years.
• Asian over-capacity: China, India and Türkiye continue to produce
  steel materially above domestic absorption, creating durable export
  volumes available to importers at competitive prices.
• Decarbonisation capex: European and East Asian producers are
  investing heavily in DRI and EAF transitions, partially constraining
  their export availability over the next decade.
• Iron ore and scrap dynamics: Long-cycle commodity prices
  stabilising provide a more predictable raw-material cost base for new
  entrants.

3.3 Africa Steel Market — Volume & Value

Figure 3.2

The Africa steel market reached 39.24 million tonnes in 2025 and is
forecast to grow at a 3.4% CAGR to 54.82 million tonnes by 2035, an
absolute increase of more than 15 million tonnes over the decade. South
Africa, Egypt and Morocco remain the three largest producers; Nigeria,
Kenya, Ghana and Ethiopia represent the highest-growth import-dependent
markets.

3.4 Pricing Environment

Figure 3.3

Steel-product pricing has shown volatility within a 685–820 USD/tonne
band for hot-rolled coil over the past 24 months, supporting
trading-margin capture for well-positioned merchants. Long-product
pricing has tracked broadly similar volatility. Iron-ore prices have
stabilised in the 95–125 USD/tonne band, providing a relatively
predictable input-cost backdrop for downstream processing.

3.5 Decarbonisation & Green Steel

The global steel industry contributes approximately 7–8% of total CO₂
emissions, making it a focal point of decarbonisation policy. The
European Union’s Carbon Border Adjustment Mechanism (CBAM), full
implementation from 2026, applies a carbon levy on imported steel and
creates structural advantage for low-carbon producers. ArcelorMittal
South Africa is investing in carbon-capture and storage technologies,
while Egyptian and Moroccan producers are deploying renewable energy in
steelmaking. FGRG’s planned scrap-based EAF route, combined with
renewable-energy integration, positions the Company to produce among the
lower-carbon steel grades available in the African market — a meaningful
commercial advantage as CBAM and similar regimes expand.

3.6 Industry Outlook

Over the 2025–2035 horizon, the African steel industry is projected
to expand by approximately 40% in volume and meaningfully more in value
terms as product mix premiumises. Five themes will define competitive
success: (i) capital cost of steel — capital-efficient operators will
outperform legacy integrated producers; (ii) carbon intensity —
low-carbon producers will capture EU export premia and increasingly
domestic procurement preference; (iii) supply-chain integration —
vertically integrated platforms will capture more margin per tonne than
pure traders or pure producers; (iv) regional reach — operators with
multi-corridor logistics will out-source local single-asset producers;
and (v) capital access — players with affordable, patient capital will
be best positioned to acquire stranded or sub-scale assets.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of FerroGlobe Resources Group (Pty) Ltd.