Stainless steel growth unlikely in 2020

The level of activity in the local stainless steel sector’s value chain has dwindled in the past decade, mainly owing to international competition, low steel prices and the slow growth of the local economy.

Therefore, steel industry body the Southern Africa Stainless Steel Development Association (Sassda) does not expect 2020 to be a year of substantial growth for the local stainless steel market.

“We do not foresee great changes, but rather lateral movement. The cost of material, labour efficiency and innovative solutions in fabrication and new applications will be key in maintaining higher levels of activity in the market,” Sassda acting executive director Michel Basson tells Engineering News.

However, stainless steel is maintaining reasonable global growth, he says. This is mainly owing to the material’s “excellent” life cycle costing and corrosion resistance.

“Stainless steel is also popular because of its application-specific solutions and low- maintenance requirements. This material cannot be easily replaced by less costly alternatives,” Basson comments.

Meanwhile, the association believes that stainless steel remains the most cost-effective solution in many applications and will remain a growing and competitive material in several markets.

“Our mandate is for industry to positively contribute to the national and regional economy. This will create opportunities for investment in the market through advanced technology and job creation, which will lead to poverty alleviation,” he suggests.

This, he believes, can be achieved only through assisting industry in converting more tons of stainless steel locally. Sassda assists in this regard by liaising with government, developing new markets, training and education, as well as the relevant technical assistance.

Subsequently, the skills and training requirements in the stainless steel sector are rapidly changing to adjust to the demands of moving into Industry 4.0.

“There is an increasing demand for manual skills to be upgraded to be more suitable for machine interfacing such as those required by operators and programmers. Process-based thinking and systems orientation is also becoming increasingly important,” he warns.

Moreover, Basson maintains that stainless steel is one of the youngest industrial materials globally, managing to positively change people’s lives.

“It is critical in human survival and will continue to be. South Africans can support the local industry by making sure it is, indeed, stainless and locally manufactured when buying it.”

The Department of Trade, Industry and Competition developed an elaborate Steel Plan by the end of 2019 and it is being studied by Trade, Industry and Competition Minister Ebrahim Patel for implementation in the new financial year.

Although the plan may not lead to substantial growth, Basson believes that the current cooperation between government and industry can have a “positive effect” in mitigating the stumbling blocks to sustainable growth in the stainless steel industry.

He adds that the industry is heavily intertwined with the local economy but is also subject to international trade conditions.

“We have felt the impact of the US-China trade war in the local steel market, while the disheartening state of the economy is generally known and often spoken about,” Basson concludes.