Results of the August Short Track Survey

The sassda Short Track Survey had 86 respondents in August 2017. This survey uses the same questions as those used in the monthly International Stainless Steel Forum (ISSF) Short Track Report. However, the ISSF survey is only of stainless steel primary producers and thus the results are not directly comparable, but are used to give context.

Current Order Situation

When looking at their Current Order Situation, 31% of sassda respondents had a positive response which is better than last month (27%) but much lower than the same month last year (39%). The weighted average is up on last month but still considerably lower than August 2016.

For ISSF flat product producers, 74% of respondents had a positive response to orders levels, which is better than last year July (62%). The weighted average is slightly higher than the same month last year (2.74 vs. 2.67).

For ISSF long product producers, the order situation has remained the same as the previous month (78%) and was up on a year ago (62%). The weighted average (2.90) was slightly lower than the previous month (2.97) but higher than a year ago (2.68).

You consider your current business situation to be

In terms of their Current Business Situation, 27% of sassda respondents thought the current business situation was positive, which is slightly up on last month (24%) but down on a year ago (32%). The weighted average has improved slightly to 2.12 this month compared to 1.94 last month but it is still lower than last year August (2.20).

For ISSF flat products producers, the results are as follows:

The percentage of ISSF flat product producers who felt that the current business situation was sufficient or good stood at 61% in July, compared to 52% in the previous month. This is better than the same month a year ago (48%).

For ISSF long products producers, the results are as follows:

In terms of ISSF Long Product Producers, July had a 64% positive response which was the same in the previous month. This was a huge improvement on the same month last year (38%). The weighted average of 2.78 was up on last month (2.71) and significantly higher than a year ago (2.32).

What are your stainless steel related business expectations for the next three months

With regards to sassda respondents’ business expectations for the next three months, the outlook was slightly better than last month with 22% thinking that things would get better (20% last month) and 8% expecting things to get worse (11% last month). However, expectations are lower than the same month last year with a weighted average of 2.71 compared to 2.85.

The above data can be converted to the Sassda Expectations Index, where the index is calculated as 0.5 x % unchanged + % better. Above 50 would predict expansion in the next three months.

Again, August saw an improvement in outlook compared to the last few months and is at the best level since February.

For ISSF flat products producers, the results are as follows:

Finally, we had a few respondents that felt that things would get better in the next three months (9%). The weighted average (2.66) is slightly up on July 2016 (2.62).

For ISSF long products producers, the results are as follows:

21% of ISSF long product respondents felt that business would get better in the next three months, with 7% thinking it would get worse. This shows an improvement in sentiment on the same month last year with the weighted average rising from 2.59 to 2.71 and an improvement from last month (2.29).

The comments received from sassda members were:

  • Again, very blessed with a full order book.
  • Consumer confidence is at an all-time low and this is reflected in the retail and B2B trade. China plays a disproportionate role in our local market and this is the result of imports and government support for Chinese trade. Local retailers and importers are having a field day while destroying local manufacturing capacity.
  • The wage negotiation settlement from our perspective was positive news for our business. Another positive is the continued support that we are seeing from our suppliers, in particular, Columbus Stainless. Asian manufacturers continue to sell their product at material costs and these companies are making a loss – as published in their annual figures. Why and for how long is a question that we cannot answer. The dti, apart from some minor support with exhibitions, offers no real assistance to exporters.
  • I have tendered for various Balustrade jobs but I see Johannesburg-based manufacturers seem to be getting a lot of the jobs.
  • There is nothing happening in the casting business at the moment.
  • Trust you will find a way to ensure that local business and projects buy from the local market and not Johannesburg or Cape Town
  • Probably worse…
  • The market is more buoyant with increases in quote stock and tenders.
  • Surprising surge of projects.
  • The balance of this and next year is characterised by a range of challengers which include low economic growth, if any, volatile RoE, rising unemployment, lack of political know-how, low production issues and growing unemployment.
  • The market is still quiet. I think it may be due to the major companies having their financial year ends and not wanting to spend any money.
  • The market is very responsive and we enjoy the good times.
  • There are many projects in the pipeline and should, within the next six months, come to fruition.
  • There are projects coming on stream at long last and some good potential for stainless steel product.

Overall, this sassda survey seems to indicate a gradual recovery in our industry and an improvement in outlook but current orders and the business situation are still below those of last year.

Thanks and Kind Regards

Angie Baker
KwaZulu-Natal Regional Manager
Southern Africa Stainless Steel Development Association
Tel: +27 11 883 0119 | Cell: +27 82 604 0040

 

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