Results of the March 2018 Short Track Survey

The Sassda Short Track survey had 95 respondents in March which is a great improvement on last month (71). 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:

35% of sassda respondents had a positive response to the current order situation which is slightly better than a month ago (31%) and the same as this time last year (34%). The weighted average is also better than last month, as well as March 2017.

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 the same month a year ago (56%). The weighted average is also better (2.61) compared to February 2017 (2.56)

For ISSF Long Products, the results were:

For ISSF long product producers, 81% of respondents had a positive response to their order levels which is about the same as last month (82%) and as the situation a year ago (82%). The weighted average (3.12) was lower than last month (3.23) but about the same as a year ago (3.11).

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

33% of sassda respondents thought the current business situation was positive, which is up on last month (27%) and up on a year ago (28%). The weighted average is slightly better this month (2.26) compared to last month (2.23) and is higher than that of March last year (2.18).

For ISSF Flat Products, the results were:

The percent of respondents who felt that the current business situation was sufficient or good stood at 55% for February 2018, which is about the same as January 2018. This is also considerably lower than the same month a year ago (70%).

For ISSF Long Products, the results were:

January had a 69% positive response which was up on the previous month – 64%. This was a decrease on the same month last year (77%) The weighted average of 2.88 was down on last month (2.91) and lower than a year ago (2.91).

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

The outlook in March showed a drop in respondents’ business expectations in three months. 22% thought things would get better (compared to 41% in February). The weighted average of 2.72 is however higher than a year ago (2.59).

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 previous two months, the index had been above 60 indicating consistent expectations of expansion, however March has seen a bit of decrease to 57.3%.  This is an improvement compared to the same month last year (53%).

For ISSF Flat products. The results were:

5% of respondents felt things would get better which is the less than the previous couple of months of 9%. The weighted average (2.44) is lower than February 2017 (2.50).

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 13% thinking it would get worse. This shows a decrease in sentiment on the same month last year with the weighted average dropped from 2.50 to 2.42.

The comments received from Sassda members were:

  • A catastrophic situation to be in.
  • Business expectation in general is improving.
  • Business in KwaZulu-Natal seems to be at a low, with very little potential and fabricators complaining of empty workshops.
  • Plenty of stainless steel work is being done by non-members of Sassda, whose prices are very low, and their standard of work is very poor. This gives the product a bad reputation. The foreigners are the people that are doing this pathetic work and getting away with it.
  • … still working on numerous projects. [We are] busy. The general machine shop industry is quiet
  • Some of our clients have decided to have the local content of their products formally verified
  • The market seem to be active with enquiries but the follow through orders are slow.
  • The stainless steel business situation in Nigeria is down at the moment but with an improved economy, the market will soar.
  • Unfortunately, it would appear that notwithstanding that our new president is optimistic about a positive turnaround in the Economy, most economists are of the opinion that it will still take many months before we see reasonable growth in South Africa.
  • The lack of skilled and more importantly experienced labour is what really exacerbates the ongoing problem. Exaggerated high school and tertiary pass rates don’t help the required skills necessary in a growing economy.

It seems that the order situation may have improved slightly from last month but the Sassda Expectations Index has shed 8.2 points since February although the index is still above the 50-point mark that separates expansion from contraction.  This is in line with the ABSA PMI. This index shed 3.9 points to reach a level of 46.9 in March from 50.8 in February.

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