ArcelorMittal South Africa reported a deeper first-half loss on Thursday but forecast growth in steel demand in Africa in the second half.

Headline losses grew to 1.619 billion rand ($125.5 million)for the six months to June 30 from a loss of 458 million a year earlier.

The company cited higher costs for imported coking coal and iron ore, exchange rate volatility and continued weakening of the South African economy.

Shares in the company, majority-owned by top global producer ArcelorMittal, were down 2.6 percent in early trade.

“Projections are that Africa will experience growth in demand on the order of 2.3 percent,” ArcelorMittal said in its earnings statement.

African markets, specifically in the west and east sub-Saharan regions, have remained positive due to infrastructure investments in rail, roads and energy, it said.

Steel consumption in South Africa fell by 3.8 percent in the first half due to subdued economic growth and continued imports of large quantities of steel, especially from China, it said.

The steelmaker has long complained about cheap imports eating into its business.

South Africa plans to impose emergency “safeguard” tariffs on imports of certain flat hot-rolled steel products from July due to the damage done to domestic production.

The tariff is to stay in place for three years and fall from 12 percent in the first year to 10 percent in the second year and 8 percent in the third.

($1 = 12.8974 rand)