The recent Sassda AGM outlined a number of interesting insights from both the global and local sectors. Here we give a breakdown of Executive Director John Tarboton’s presentation at the event…
A WORLD VIEW
South Apparent Consumption versus Global Production
Globally, the growth of stainless steel is forecast to be 6% for 2018 and there has/will be an annual increase from 2010 to 2020 of 2-million tons a year. Speaking at the annual ISSF Workshop that Sassda attended in China, Marcus Moll, Managing Director, SMR GmbH described stainless steel as being at a crossroads. It is now the acid test to see which stainless steel producers are vulnerable. China now has a higher per capita consumption of stainless steel than Europe and its largest producer of stainless steel,
TsingShan is described as the Tesla of the stainless steel industry.
Some Chinese producers also boast incredibly competitive production costs of $1 450/t as compared to typical European costs of $2 000/t and are home to the new generation of “4-in-1” stainless steel plants which backward integrate to save energy and production costs by using, for example the Rotary Kiln Electric Furnace – Argon Oxygen Decarburiser (RKEF-AOD) as an integrated process.
VALUE OF OUR INDUSTRY?
South African Apparent Consumption versus Global Production figures have unfortunately deviated from one another, as the graph above shows. Local Apparent Consumption basically tracked Global Production until 2014, when the two began to separate from one another, with global production now sitting at around 48 mt in 2017 and local apparent consumption declining to 148 000 t per annum. South African consumption has declined 28% since the peak in 2014 and growth has been elusive reflecting the lacklustre domestic economy. That said, the value that the stainless steel sector adds to the South African economy cannot be under estimated, with its current worth sitting at R37 billion per annum and crucially it is currently supplying 114 000 jobs into the economy.
ARE WE POISED FOR GROWTH OR STAGNATION?
Based on the monthly Sassda Short Track Survey of member sentiment, the majority of respondents over the last 12-months still consider their current order situation as “poor or not sufficient” but those that consider it “sufficient” or “good” has remained consistent, despite the economic headwinds that have buffeted our country and industry. This fairly ‘flat’ outlook, is also reflected in how Sassda’s members categorise the current stainless steel business. Looking ahead, in terms of expectations for the next three months, the bulk of respondents feel the business outlook will remain unchanged but encouragingly the number who feel it will improve, holds steady.
The Overall Expectation Index therefore remains above the crucial 50% mark that separates expansion from contraction, as well as the long-term average of 55%, although it has now dipped from a high in March 2018.
PROACTIVE GROWTH
Despite South Africa’s declining stainless steel apparent consumption, Sassda member numbers are increasing and it now has 400 members. This bears testament to the success of Sassda’s strategy adding value to their members.
Key to this excellent performance are initiatives such as the annual Buyer’s Guide which aims to link customers with Sassda members. Other products that have taken Sassda from strength to strength include the highly popular Stainless Steel Magazine and the biennial Sassda Columbus Stainless Awards, which celebrate excellence and innovation
Sassda also launched a highly successful Life Cycle Costing competition in 2017 which featured a R125 000 trip to Paris and aimed to increase usage of its new Lifecycle Costing (iOS and Android) App and bring awareness to the long-term economy of specifying stainless steel.
EDUCATION AND TRAINING
One of Sassda’s core pillars has always been education and training but in 2017/18 this was taken to the next level, through strong engagement with State Owned Enterprises (SOEs) which saw the Sassda Fundamentals courses being conducted at Transnet, Eskom and the Department of Water and Sanitation, all of whom participated in the course, which delegates described in glowing terms.
Sassda also focused heavily on the end users of stainless steel in its training initiatives by offering tailored information to specific sectors. For example, tailored Architectural seminars were very useful in getting stainless steel into architects thinking and have received excellent support.
Another aspect of this renewed approach to education and training has seen Sassda’s Technical Evenings continue to grow providing the detailed information and insight that Google simply cannot!Sassda has also strengthened its lobbying of government for the greater good of the industry by hosting a number of highly successful visits with the dti to regional members.
EXTERNAL OUTREACH
Sassda has sought innovative ways of growing member understanding of the value it adds and fostering direct engagement with its members via a number of ‘external’ communication activities based on a strategy of core content creation to provide in-depth invaluable insight into the local and global market on a variety of newsworthy stainless steel topics. This information is then distributed via eMailers, press releases, social media posts all of which ‘push’ readers back to the Sassda website for more information and reading this has resulted in stellar growth of traffic to the website.
AFRICAN VISION
In line with the dti’s stated aim of fostering regional value chains in terms of harnessing the individual expertise found in a group of countries to create world-class outputs of product and services, Sassda has once again championed members’ opportunities across the continent with recent trips to Kenya, Tanzania and Zambia and the prospect of enhanced involvement in local stainless steel associations and direct involvement in education and training initiatives to improve the level of knowledge at source.
