In a recent webinar on the “State of the Stainless-Steel Nation”, the executive director of the Southern Africa Stainless Steel Development Association (Sassda), Michel Basson, provided a comprehensive local and global overview of the sector. Creating increased demand for South African stainless steel within key sectors such as mining, automotive and food and beverage, is a key focus area for Sassda in 2023.

Basson stated: “The local industry is well positioned to supply African markets with a variety of world-class stainless-steel products that can rival other global competitors. This presents significant opportunities for local fabricated products, including industrial capital equipment for mining, agricultural applications, food processing and health applications.”

Punting the use of local stainless steel

Basson explained how the local demand can be stimulated through the designation of local products in infrastructures at all government levels. Sassda has therefore put measures in place to strengthen the industry, provide access to new opportunities and capacity in other sectors. Engaging with the government for its members is part of the association’s mandate, including lobbying the DTIC to exclude stainless steel from the recently announced ban on scrap export regulations.

Furthermore, Sassda is also exploring opportunities to replace numerous applications where galvanised metals are currently being utilised with 3CR12, the world’s most specified 12% chromium utility stainless steel. Various partnerships are in place to facilitate localisation in the food and beverage, medical, automotive, cutlery, travel and container industries in multiple countries, providing a range of opportunities for the local stainless-steel market.

A global view

Taking a broader view of the current state of the stainless-steel sector globally and locally, Basson reported that despite global issues over the past few decades, stainless steel has maintained a steady annual compound global growth rate of 5,8%. This is more than double the growth rate of copper, and 30% more than aluminium. Between 2005 and 2021, China experienced rapid growth in stainless-steel production, while South Africa remained stable at approximately 13% of the global production.

Despite the impact of Covid-19 on the industry over the past three years, resulting in a negative trend in local production and export shrinkage in 2022, the South African stainless-steel industry is still regarded as a world-class supplier. The sector displayed remarkable resilience in bouncing back from the pandemic-induced restrictions.

The power crunch

Stainless-steel production and fabrication are currently facing their biggest hurdle to date: Loadshedding. The effects of this include diminishing staff safety, motivation, productivity and increased living costs, contributing to a visible decline in apparent consumption during 2022. The South African Reserve Bank has identified this as a huge future risk that could result in social unrest, straining socio-economic stability.

“But we need to be optimistic about the future, and this is possibly the time to rethink what we do and how we do it. The energy issue may be an opportunity to make the industry more energy efficient and less energy dependent,” says Basson.

Enhanced access

Sassda’s focus has been on adapting its processes by providing enhanced tools to facilitate easier access to its members’ stainless-steel products, together with the expansion of the association’s education and training programmes. This training includes several accredited CPD presentations that can also be customised.

Basson concluded: “Despite challenges facing the industry, Sassda is optimistic about the future of the South African stainless-steel sector and based this optimism on our industry’s cohesive ‘strength in numbers’. With these collaborative efforts and the resilient nature of our industry, we remain a strong global competitor in 2023.”

Key points:
• Key local sectors should be using more local stainless steel.
• Potential for local supply into key government projects.
• The power crisis is the biggest challenge for an energy-intensive industry in 2023.

Full acknowledgement is given to for the information in this article.

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