state of the stainless steel nation
and typically takes more than a year. This could cause a halt in auto production or at least a very uncompetitive scenario. The direct job losses at AMSA are quoted as 3 500, industry experts estimate the immediate indirect job losses at 30 000 which includes service providers to the AMSA plants. The following quantitative impact analysis was submitted by the auto industry: • Local steel tonnage loss: +- 70 000 tons p.a. plus SAAM35 volumes forecast at more than 100 000 tons.
• Cost increases due to importation: 25% to 35%.
• Knock on effect to losses of related sub & full assemblies: More than 7% resulting in an estimated R35-billion p.a. • Suppliers at risk: Approximately 17 suppliers will be directly affected (Domestic OEM suppliers plus exporters). • OEM & Supplier Profitability Erosion due to loss of localisation: No longer qualifying content for the Automotive Production Development Program. • Short-term jobs impacted: +- 30 000 including suppliers and backward linkages, growing in the medium to longer term. Against this challenging background how does Sassda see 2024 playing out for the local sector? A key part of Sassda’s role is to identify potential avenues for localisation and increases the local tonnage converted. However, the bottom line for the growth of the stainless steel sector in terms of employment figures and tonnage consumed would be the local socio-political environment and improvement of service delivery with a major focus on improving the consistency of electricity supply, rail transport and port efficiency. We are also acutely aware that this is an election year that brings a lot of uncertainty and volatility. The immediate future does not have a positive slant, but we trust that in time our industry will shine again because stainless steel remains simply brilliant.
The timespan covered by the graph indicates various sector activities and acts as a snapshot of the COVID-19 and post-pandemic unfolding of events. The negative historic growth rate continued and accelerated during 2020 when the industry experienced severe COVID lockdown conditions. To some extent, this was mitigated by Sassda’s work to get the dtic approval for the stainless steel to run at a 50% capacity compared to the 30% required for other industries.
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Issue 1– 2024
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