SA steel sales at highest in 25 years

Carbon steel sales totalled 2.6 million tons in the six months to June, up 24 percent on the first half of last year when almost 2.1 million tons were sold. They are the highest sales since 1981.

South Africa’s domestic consumption of primary carbon steel products is running at 500 000 tons a month.

Second-quarter steel sales rose 9 percent to 1.345 million tons when compared with the first quarter of this year, when 1.235 million tons were sold.

“The economy continued to grow relatively strongly in the first half of this year and the nature of this growth was largely unchanged from that experienced during the past three years, with domestic spending still the key driver in the economy,” said the SA Iron and Steel Institute (Saisi), which has the country’s major steel makers as its members.

However, economic growth was expected to slow in the second half of this year, the industry body added.

Increasing inflation and interest rates were likely to slow consumer spending, and in turn the demand for steel.

On the other hand, the government’s infrastructure drive and the expansion of transport parastatal Transnet and power utility Eskom were expected to gain momentum.

This expansion was set to support the performance of the construction, transport and communications sectors as well as mining and manufacturing.

“Other parts of mining and manufacturing sectors are likely to take strain from the anticipated slowdown in global growth and some moderation in commodity prices,” Saisi said.

Mittal Steel South Africa’s incoming chief executive, Rick Reato, said last week that the company had not been able to meet local demand for steel products fully.

All four of the company’s plants were operating at full capacity and the group was reducing steel exports where it could, he added.

Saisi said South Africa’s imports of carbon and alloy steel products increased 8 percent to 235 000 tons in the first half of this year, up from 152 000 tons during the same period last year.

In recent times, Mittal Steel SA had been exporting about 40 percent of its steel production. However, growing domestic demand could see steel exports drop to 20 percent of total output. Reato said the company was exporting only from its Saldanha mill in the Western Cape. ‘ IOL.

October 2006
« Sep   Nov »