state of the stainless steel nation
A critical juncture for local stainless steel
How would you categorise the performance of the South African stainless steel sector in the last three years? The local decline in production and consumption, which was also experienced globally, was mainly caused by a decline in economic activity due to the pandemic as well as global logistical issues. As the shutdown regulations were eased we expected a spike in stainless steel demand for re-stocking. This took place worldwide, and it was, we believe, the main driver for the growth of more than 20% in local consumption during 2021. Although this was expected, it was also understood to be short lived as stock levels started to stabilise and the industry returned to normality. The domestic market continued with this growth trend and increased by more than 3% in 2022. This was significant, in light of the impact of the nickel price volatility during the early parts of 2022. It was also encouraging that the rate of growth in local consumption of stainless steel showed an increase of more than 300% compared to the South African GDP growth during the first post-pandemic year.
The 2022 performance is even more impressive seen against the backdrop of a weak economy, floods, unrest, and the lack of electricity experienced by industry during the period. This momentum and the gains made in our work with the Steel Master Plan indicated a solid starting point for continued growth in the years to come. Overall, since 2018 stainless steel exports from South Africa declined from around 450 000 tons per annum to just under 150 000 tonnes in 2023. This had a similar influence on the local production of stainless steel since local production is mainly driven by the export market. Local production nearly halved over the period bringing production figures to 218 000 tonnes. Bear in mind that the local production capacity is more than three times the current level. The result of this is a decline in the local conversion of stainless steel of around 16% during 2023.
How is Sassda championing the growth of the local stainless steel sector?
Sassda’s growth strategy within the framework of the Steel Master Plan is dual faceted. Our mandate speaks about the
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Issue 1– 2024
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