South African Stainless Steel Sector expected to sidetrack in 2016

South Africa’s stainless steel consumption, which has recovered from the slump experienced during the 2009 recession, is expected to track sideways in 2016.

Apparent consumption in 2015 rose 1.9% year-on-year to 190 000 t, which is below the post-crisis peak of nearly 210 000 t, but still marginally better than pre-crisis peak levels.

Southern Africa Stainless Steel Development Association (Sassda) executive director John Tarboton tells Engineering News Online that the 2015 performance surprised slightly on the upside, but still represented a challenging year for the industry.

He stresses, though, that the stainless steel sector is in a distinctly “different space” from the carbon-steel industry, which is in major distress.

Sassda Stainless steel industry body predicts decrease in demand John Tarboton South Africa’s primary producer Columbus Stainless, which is 76% owned by Spain’s Acerinox, is supplying about 80% of demand with the 20% balance comprising mainly product not produced by the Mpumalanga mill, such as wide plate or exotic alloys.

Sassda has 378 member firms, most of which are fabricators, which collective employ 30 000 people. Tarboton stresses that, therefore, the association is generally supportive of imports, as long as these are not priced anti-competitively.

Nevertheless, it has been studying unfair subsidies, particularly in China, to assess whether any action is required to safeguard domestic interests. Chinese stainless steel production more than tripled from 2008 to 2014, while production in the rest of the world grew only 3.7% in the same period.

However, no applications for protection have as yet been made to the International Trade Administration Commission of South Africa.

In addition, there has been a slowdown in global production recently, with year-on-year global production during the first quarter rising only 0.1% and Chinese production contracting by 1.4%.

The downstream fabricators manufacture products for various sectors, from mining and automotive, through to food processing and building.

There has been particularly strong growth for architectural applications, while future growth potential is expected to arise from the structural, fuel cell and roofing subsectors.

Domestic fabricators have also been navigating the weak South African economic climate by increasing exports, particularly into Africa, the US and Europe. “We expect the export trend to continue in 2016,” Tarboton says.

To support further exports, Sassda plans to ensure greater participation in trade missions organised under the aegis of the Department of Trade and Industry, with a particular desire to expand opportunities for South African products in Latin America and Asia.

Watch the interview with John Tarboton here.

Published 22/12/2015 16:29:20 Last Modified 22/12/2015 16:31:39

Related Links: