Results of the February 2019 Sassda Short Track Survey

The Sassda Short Track survey had 72 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:

33% of Sassda respondents had a positive response to the current order situation which is an increase, when compared to January (28%) and better than a year ago (31%). The weighted average (2.31) is better than January and better than a year ago (2.26).

For ISSF Flat Products, the results were:

For ISSF flat product producers, 57% of respondents had a positive response to their orders levels, which is lower than a year ago (70%). The weighted average is also lower (2.57) compared to January 2018 (2.70).

For ISSF Long Products, the results were:

For ISSF long product producers, 69% of respondents had a positive response to their order levels which is the same as last month (63%) but worse than a year ago (82%). The weighted average (2.75) is worse than December (2.76) but lower than a year ago (3.23).

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

25% of Sassda respondents thought the current business situation was positive, which is better than January (22%) and lower than a year ago (27%). The weighted average has shown an increase this past month (2.25) compared to last month (2.18) and is better than February last year which was (2.23).

For ISSF Flat Products, the results were:

The percent of respondents who felt that the current business situation was sufficient or good stood at 43% for January 2018, which is the same as the previous month (43%) and less than a year ago (56%).

For ISSF Long Products, the results were:

January increased with 54% positive response compared to 44% for the previous month. This was better than the same month last year (53%). The weighted average of 2.63 was higher than the previous month (2.33) and lower than a year ago (2.59).

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

24% of respondents thought things would get better which is better than the previous month (22%). However, 10% thought things would get worse.

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.

This month has shown a further increase in expectations with moving above 57%, the long-term average.

For ISSF Flat products. The results were:

In January 2019 10% of the respondents felt things would get better with (0) % expecting things to get worse. The weighted average (2.65) is also higher than January 2018 (2.44).

For ISSF Long Products, the results were:

13% of ISSF long product respondents felt that business would get better in the next three months, with 6% thinking it would get worse. The weighted average of 2.63 which is higher than last month (2.33) and better than a year ago (2.59).

The comments received from Sassda members :

 

  • It seems to me the stainless steel industry is shrinking;
  • Continued imports from China will decimate local manufacturing;
  • We don’t see any major business growth until after the national elections, and hopefully see some economy improvements thereafter. Unfortunately, the continued unabated level of corruption being one of the main ongoing problems to any economic improvements going forward.
  • Imports still as always continue to dominate, at least in my industry they do..;
  • Challenging times;
  • We are of the opinion that business in the manufacturing sector will in future improve exponentially;
  • Nothing new to report except that Sappi-Saiccor multi-million rand project continues;
  • The unchecked importation of finished product and long product is destroying the local manufacturing sector. By the time government wakes up we won’t be able to manufacture anything in SA anymore;
  • The current import levies imposed on stainless steel are hampering our business. We compete with European countries and have lost a least two big orders due to material prices;
  • Eskom will have to start to release money for maintenance. A lot of components in the power stations are stainless steel that will be positive for members;
  • I really hope it gets better.

The last four months have seen a steady improvement in order levels and the Sassda Confidence Index would predict an improvement, going into in 2019.

“SA business confidence declines to five-month low” – Fin24

South African business confidence fell to a five-month low in February.

The index dropped to 93.4 in February from 95.1 in the previous month, the South African Chamber of Commerce and Industry said in an emailed statement on Wednesday.

While sentiment jumped to a two-year high in early 2018 after President Cyril Ramaphosa won the leadership of the ANC and the country, confidence has waned as businesses seek reforms.

Fixed investment declined in every quarter of 2018 as the economy grew by 0.8% for the year.  Statistics South Africa said on Tuesday.

“South African economy faces serious challenges”, the chamber said.  “these challenges are now deeply entrenched and need to be handled with urgency and care.

“The upcoming elections do not serve as an opportunity to establish credible representation, but also provide a platform to come to a rational and sustainable economic policy framework that carries the support of the business community.”

Thanks and Kind Regards

Lesley Squires
Market Intelligence & Exports
Tel: +27 11 883 0119 | Cell: +27 82 758 8074