Results of the November 2018 Sassda Short Track Survey

The Sassda Short Track survey had 73 respondents in November. 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:

40% of Sassda respondents had a positive response to the current order situation which is better than a month ago (36%) but worse than a year ago (51%). The weighted average (2.38) is the same as last month and again lower than a year ago (2.43).

For ISSF Flat Products, the results were:

For ISSF flat product producers, 48% of respondents had a positive response to their orders levels, which is lower than a year ago (70%). The weighted average is also lower (2.40) compared to October 2017 (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 better than last month (63%) but worse than a year ago (81%). The weighted average (2.76) is better than September (2.70) but lower than a year ago (3.06).

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

33% of Sassda respondents thought the current business situation was positive, which is the same as October but lower than a year ago (44%). The weighted average has shown a slight decrease this past month (2.28) compared to last month (2.33) and is down on November last year which was (2.43).

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 October 2018, which is marginally lower than the previous month (45%) and less than a year ago (61%).

For ISSF Long Products, the results were:

October took a further drop with 56% positive response compared to 62% for the previous month. This was worse than the same month last year (75%). The weighted average of 2.49 was lower than the previous month (2.55) and a year ago (2.94).

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

22% of respondents thought things would get better which was the same as the previous month. However, 14% 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 slight decrease in expectations with index dipping below 55%, the long-term average.

For ISSF Flat products. The results were:

In October 2018, again none of the respondents felt things would get better with 20% expecting things to get worse. The weighted average (2.20) is also lower than September 2017 (2.56).

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 31% thinking it would get worse. The weighted average of 2.32 is higher than last month (2.10) but worse than a year ago (2.90).

The comments received from Sassda members were:

  • Busy, seems to be picking up again.
  • Difficult trading conditions.
  • Export business remains challenging due to the volatility of exchange rate and material cost inputs. Competitors in Asia are assisted with subsidies and a manipulated currency. The weaker Rand in Q3 and part Q4 enabled us to secure a very good forward export order book for 2019. While taking advantage of these short periods of opportunity helps create an order book, the challenges of creating a sustainable export business in RSA remains problematic.
  • I am of the belief that there will be a significant demand for stainless steel products in the coming months.
  • Let’s hope that business activities in the new year, 2019, turns out to be better than 2018.
  • Note that we handle both mild steel and stainless steel. In this survey we rate stainless steel enquiries and orders as poor, but the same applies to mild steel.
  • Still no fire works in the tank industry.
  • The continued pressure of cheap imports from China and the Far East will continue to be a factor in the retail market.
  • The continued undermining of local manufacturers by large retailers and importers buying from China will continue to erode local jobs and the manufacturing sector.
  • The market is getting some direction although slow. We are blessed with good carbon steel and aluminium orders.
  • The market seems to be in premature shut down mode. After all the intensive tendering, the 1st quarter of 2019 could be interesting.
  • We have been overwhelmed with orders in the last two months particularly for passivation process.

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

From the BER Weekly Review, “The FNB/BER Building Confidence Index shed 3 index points to register a level of 32 in 2018Q4. Of the four sub-sectors which reported lower confidence, the sharp increase in pessimism among architects and quantity surveyors was of particular concern. Meanwhile, the Absa Manufacturing Survey showed that confidence ticked up by 4 index points to 30 in 2018Q4. This was 11 points below the long-term average level, which means this was a fairly weak confidence reading.

Thanks and Kind Regards

Angie Baker
KZN Regional