Results of the September 2017 Short Track Survey

The sassda Short Track survey had 96 respondents in September. This month, there are no results of the International Stainless Steel Forum’s (ISSF) Short Track Survey as this report has been provisionally suspended.

Your current order situation is

39% of sassda respondents had a positive response to the current order situation which is at the best level since February and similar to the same month last year (40%). The weighted average of 2.33 is up on last month but still lower than September, 2016.

You consider your current business situation to be

32% of sassda respondents thought the current business situation was positive, which is a significant improvement on last month (27%) and the best level since February. It is, however, down on a year ago where 36% of respondents had a positive response. The weighted average has improved  to 2.25 this month from 2.12 last month, but it is still lower than September, 2016 (2.37).

Your stainless steel related business expectations for the next three months are 

The outlook was slightly lower than last month with 21% thinking that things would get better (22% last month) and 13% expecting things to get worse (8% last month). Expectations are also lower than the same month last year with a weighted average of 2.63 compared to 2.80.

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.

September saw a slight drop in outlook compared to the last couple of months but it is still above 50%.

The comments received from sassda members were:

  • A very big concern of what effect the drought will have on our 2018 order book.
  • Apart from unfavourable market conditions, there is also the problem with local prices versus imports.
  • The architectural industry is in a dire situation especially for high end products like ours. [There are] lots of promises but no money.
  • Conditions are improving and we are expecting a busy six months ahead.
  • The dti and other government organisations’ rhetoric regarding the promotion and actual implementation of policies to assist with manufacturing growth in South Africa is failing badly. In fact we are in decline. Learn from others.
  • Government needs to be driven to support the sustainability of the stainless steel industry and should generate more projects.
  • It is quite clear in the manufacturing sector that Chinese imports have affected the way our customers buy. We are seen as the stable go-to guy when the flood of Chinese imports run out. This shouldn’t be the case. South African stainless steel manufacturers should be seen as first priority and not a backstop to go to when the cheap and nasty runs out.
  • Local business is down. Luckily exports are keeping us alive.
  • Notwithstanding Treasury’s comments that the economy grew 2.5% in the second quarter, confidence, investment both locally and foreign direct investment and overall economic activity remain weak and uninspiring.
  • Poor market conditions stem from poor investment confidence.
  • Quotes for upgrade and refurbishment of various water works are likely to see an increase in call for stainless steel products.
  • Roadworks in our area have caused a massive disruption to our business, but there seems to be more domestic building at present. This happens in a slump.
  • … is busy working on a major project. They have established a new separate project department for this project. The buying office has moved to the main building. There is nothing else exciting to talk about.
  • Some work has been released after such a long time and more should come up before Christmas. We hope this continues into the next year.
  • The stainless steel industry is picking up slightly, but not by much. [There is] still room to improve.
  • The cyclical nature of the construction and retail industry make for many ups and downs throughout the year. Imported stainless steel products is still a big worry.

Thus, overall, the survey shows an improvement in sentiment from the last few months, with orders and expectations being at similar levels to this time last year.

To put this into perspective, the Stats SA report, “Manufacturing: Production and Sales, August 2017” published on 10th October, 2017 states “Manufacturing production increased by 1.5% in August 2017 compared with August 2016. This increase was mainly due to higher production in the basic iron and steel, non-ferrous metal products, metal products and machinery division (11.3% and contributing 2,0 percentage points).” However, the sassda stainless steel apparent consumption statistics are currently predicting a drop in 2017 for the third year in a row. The detailed stainless steel statistics will be reported next week.

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