Results of the February 2018 Short Track Survey

The Sassda Short Track survey had 71 respondents in February. This survey uses the same questions as those used in the monthly International Stainless Steel Forum’s (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.

For sassda respondents, the results of the first question were:

31% of sassda respondents had a positive response to the current order situation which is lower than a month ago (44%) and lower than the same month last year (40%). The weighted average is lower than last month, as well as February 2017.

For ISSF Flat Products, the results were:

For ISSF flat product producers, 70% of respondents had a positive response to their orders levels, which is better than the same month a year ago (61%). The weighted average however is the same (2.70)

For ISSF Long Products, the results were:

For ISSF long product producers, 82% of respondents had a positive response to their order levels which is lower than last month (87%) but up on the situation a year ago (80%). The weighted average (3.27) was up on last month (3.18) and higher than a year ago (3.00).

For sassda respondents, the results of the second question were:

27% of sassda respondents thought the current business situation was positive, which is down on last month (39%) and down on a year ago (35%). The weighted average has dropped this month to 2.23 compared to 2.37 last month and is lower than that of January last year (2.29).

For ISSF Flat Products, the results were:

The percent of respondents who felt that the current business situation was sufficient or good stood at 56% for January 2018, which is same as December 2017. This is also lower than the same month a year ago (65%).

For ISSF Long Products, the results were:

January had a 64% positive response which was down on the previous month – 69%. This was a decrease on the same month last year (74%) although “Good” was only at 7% in January 2017 compared to 29% January 2018. The weighted average of 2.91 was up on last month (2.88) and higher than a year ago (2.76).

For sassda respondents, the results of the third question were:

The outlook in February showed yet another increase in respondents’ business expectations in three months being better. 41% thought things would get better (compared to 39% in January). This is the highest positive response since this survey began two years ago. The weighted average of 2.97 is also slightly higher than a year ago (2.96) and now the highest we have had since this survey started.

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.

For the last four months, the index has been above 50 indicating consistent expectations of expansion, with February 2018 having a record high 65.5%, up marginally on February, 2017.

For ISSF Flat products. The results were:

9% of respondents felt things would get better which is the same as the previous couple of months. The weighted average (2.44) is lower than January 2017 (2.50).

For ISSF Long Products, the results were:

12% of ISSF long product respondents felt that business would get better in the next three months, with 6% thinking it would get worse. This shows a decrease in sentiment on the same month last year with the weighted average dropped from 2.80 to 2.59.

 

 

 

The comments received from Sassda members were:

 

  • … have no orders for the 2nd half of 2018. By this time (in our sector) we should be revving.
  • Good to see a change in Government – perhaps business will improve soon.
  • Market is stabilising with much positive sentiment
  • Material prices and productivity is killing the manufacturing sector. The exchange rate is also not in our favour and it is difficult to replace machinery.
  • Stainless steel gives quality and must be encouraged; this will give economy of scale and hence price drop.
  • Stainless steel products are directly affected by budget and time constraints.
  • The drought has finally caught us.
  • The economic prospects going forward are looking positive. It is encouraging hear new president Cyril Ramaphosa’s positive outlook for the future and the new cabinet he has put together.
  • The importing of finished stainless steel products is still undermining local manufacturers. How is the Sassda action on duties progressing?
  • We are getting more enquiries and tenders, so hopefully this is a positive sign going forward.
  • We are likely to see more imports, due to the strengthening of the rand.
  • We should launch a campaign on awareness of cost saving by use of stainless steel, including preventative maintenance at all plants.

Thus this survey shows that there has been a marked improvement in expectations but a deterioration in current orders. Anecdotal evidence from members would suggest that recovery is lumpy at the moment. Nonetheless, the recent political changes have certainly improved the outlook for this year. Last year, apparent consumption of primary products declined by 5.6%, which is now 28% off the peak reached in 2014. There is a good chance that this decline over the last three years may now have come to an end.

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