Results of the June 2018 Short Track Survey

The Sassda Short Track survey had 75 respondents in June. 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:

28% of Sassda respondents had a positive response to the current order situation which is lower than a month ago (33%) and lower than a year ago (32%). The weighted average (2.12) is lower than last month (2.33) and a year ago (2.15).

For ISSF Flat Products, the results were:

For ISSF flat product producers, 64% of respondents had a positive response to their orders levels, which is better than a year ago (57%). The weighted average is also slightly higher (2.61) compared to May 2017 (2.53). Results are the same as April 2018.

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 deterioration on last month (89%) but better than a year ago (71%). The weighted average (3.09) was also lower than April (3.15) but much better than a year ago (2.83).

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

19% of Sassda respondents thought the current business situation was positive, which is down on last month (31%) and down on a year ago (25%). The weighted average has shown a marked drop this month (2.04) compared to last month (2.30) and is about the same as that of June last year (2.03).

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 May 2018, which is the lower as the previous 2 months (55%) but better than a year ago (39%).

For ISSF Long Products, the results were:

May had a 71% positive response which was down on the previous month (77%). This was however much better than the same month last year (50%). The weighted average of 2.83 was down on the previous month (3.03) but higher than a year ago (2.57).

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

The outlook in May showed a decrease in respondents’ business expectations in three months. 17% thought things would get better (compared to 26% in May). The weighted average of 2.62 is however higher than a year ago (2.39).

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.

Although this month has shown yet another drop to 54%, this is still a better outlook than June last year (46%) and is still above the 50-point mark which separates expansion from contraction.

For ISSF Flat products. The results were:

In May 2018, 5% of respondents felt things would get better which is the same as April 2018. The weighted average (2.50), however, is much better than May 2017 (2.17).

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 12% thinking it would get worse. Even though this shows a slight decrease in sentiment compared to the previous month there is a significant increase in sentiment on the same month last year with the weighted average rising from 1.96 to 2.41.

The comments received from Sassda members were:

  • Cape water will positively impact on next year’s crop, tank sales and potential from greater resulting employment.
  • [The] economy [is] bad, otherwise stainless is the way to go.
  • It is extremely difficult to try and manage a sustainable export manufacturing business in RSA with the twin challenges of; a) volatile exchange rate, and b) competing against a subsidised Chinese export industry.
  • Material suppliers that provide services such as laser cutting, bending, etc. put us as manufacturers under a lot of pressure. How [does] one compete against your supplier?
  • “… has received a multi-million rand order from Sappi. All stainless steel and duplex steel. Sapref continuous with its maintenance program. Nothing else to report.”
  • The fuel price is and will continue to slow the economy.
  • The RSA economy has shrank from the first quarter. Mining and manufacturing output has weakened. The continuing inflation rate as well as the VAT increase to 15% and Rand devaluation trend will increase the landed costs of imports.
  • Very quiet in our industry.
  • We are seeing slight signs of recovery in the market but at a very slow pace. [There is] still not enough to sustain all the competitors in the market. We remain positive!!
  • We have received more stainless steel enquiries in the last month than in the previous five months. Hopefully, this trend continues

The stainless steel industry seems to have taken yet another dip in sentiment over this last month but this is still better than this time last year. Numerous members have suggested that more quotes are being done of late which suggests that business could improve in the second half of the 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