Results of the July 2018 Short Track Survey

The Sassda Short Track survey had 65 respondents in July. 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:

30% of Sassda respondents had a positive response to the current order situation which is slightly better than a month ago (28%) and a year ago (27%). The weighted average (2.22) is also better than last month (2.12) and a year ago (2.12).

For ISSF Flat Products, the results were:

For ISSF flat product producers, 59% of respondents had a positive response to their orders levels, which is lower than a year ago (65%). The weighted average is however slightly higher (2.59) compared to June 2017 (2.56).

For ISSF Long Products, the results were:

For ISSF long product producers, 83% of respondents had a positive response to their order levels which is the same as last month (83%) and better than a year ago (78%). The weighted average (2.97) however was lower than May (3.09) but the same as than a year ago (2.97).

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

27% of Sassda respondents thought the current business situation was positive, which is up on June (19%) and on a year ago (24%). The weighted average has shown an improvement this past month (2.16) compared to last month (2.04) and is up on July last year (1.93).

For ISSF Flat Products, the results were:

The percent of respondents who felt that the current business situation was sufficient or good stood at 50% for June 2018, which is the same as the previous month and about the same as a year ago (52%).

For ISSF Long Products, the results were:

June had a 71% positive response which was the same as the previous month. This was however much better than the same month last year (64%). The weighted average of 2.73 was down on the previous month (2.83) and about the same as a year ago (2.71).

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

20% of respondents thought things would get better (compared to 17% in June). However 15% 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 deterioration in expectations and is at the lowest level in over a year. It is still marginally above the 50-point mark which separates expansion from contraction.

For ISSF Flat products. The results were:

In June 2018, 9% of respondents felt things would get better which is slightly better than May 2018. The weighted average (2.38), however, is much lower than June 2017 (2.66).

For ISSF Long Products, the results were:

6% of ISSF long product respondents felt that business would get better in the next three months, with 18% thinking it would get worse. This has resulted in the weighted average of 2.41 showing a significant drop compared to last month (2.59).

The comments received from Sassda members were:

  • Despite the new regime – business still not happy as was assured some 6-7 months ago.
  • Economy clouded by policy uncertainty.
  • Exciting times ahead of us, market is responsive and high activity levels. Looking forward to the second half of 2018.
  • It is the duty of the supplier to ensure that all stainless and other steel materials as supplied are with the accompanying certifications. This practice is greatly neglected in the industry and causes major losses due to lack of materials certification being present.
  • One of the reasons why our orders are decreasing is because even though our costs are market related, our prices are not Chinese related.
  • Our main business is focussed on copper and its alloys, the level of stainless casting manufacture is relatively small. We would like to secure more work however.
  • Stainless steel orders in Kenya are low compared to last year.
  • The Industry is extremely quiet. If things continue at this rate we will be forced to put guys on short time. There is a small change in amount of sales but still not meeting target.
  • The recent percentage growth report put out by the Reserve Bank for the remainder of this year and 2019 is quite depressing.
  • The wine tank business is not good this year, mainly due to the drought.
  • There is more work around, but not enough to go around!!!
  • We are noticing an increase in our monthly volumes for the last two months.
  • We await the outcome of the second round of US tariffs on China. We assume that by accepting investments and loans from China, that RSA condones (or is unaware) of unfair Chinese trade practises.

In conclusion, it can be seen that things are tracking sideways and the outlook is deteriorating.

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