South African steel output up

South African steel production rose 3.6% year on year in February to 496,000 tonnes after falling 4.2% in 2016 to an estimated 6.141-million tonnes, according to the World Steel Association.

Steel production in SA rose 3.6% year on year to 496,000 tonnes in February after falling 4.2% in 2016 to an estimated 6.141million tonnes, according to the World Steel Association.

Global steel output in February rose 4.1% year on year to 136.5-million tonnes after a 0.8% rise in 2016 to 1.6285-billion tonnes. In 2016 crude steel production fell in Europe, the Americas and Africa, but rose in the Russian commonwealth, the Middle East, Asia and Oceania.

Africa’s production fell 4.7% in 2016 to 12.189-million tonnes. SA’s share of African steel production was just more than half. In February, Egypt overtook SA after its steel production surged 46.8% to 507,000 tonnes.

The largest producer in 2016 was China, which increased production 1.2% to 808.4million tonnes. It raised its share of global production to 49.6% in 2016 from 49.4%. In February, China raised its production 4.1% to 61.2-million tonnes.

SA’s steel production fell 7.6% year on year in the first half of 2015 to 3.2-million tonnes as the industry battled with electricity supply and poor domestic demand, but recovered in the second half of 2016 with a 3.1% rise in November to about 498,000 tonnes after jumping 13.8% in October to 534,000 tonnes. The poor demand was due in part to the government’s multibillion-rand infrastructure investment plans failing to gain traction, as investment in steel-intensive railway corridors failed to take off.

The government’s economic cluster said in early September 2016 that steps had been taken to accelerate implementation of its nine-point plan. The cluster is at an advanced stage in preparing for the implementation of 40 investment projects.

In the 2017 budget, the Treasury outlined plans for R947.2bn in infrastructure spending over three years. The largest portion — R327.7bn — will be invested in the steel-intensive transport and logistics sector. In the 2013 budget, the Treasury said the government would spend R828bn over three years, yet it spent R59bn less at R768bn.

By contrast, the private sector has invested heavily in steel-intensive construction, with reports of shortages of steel reinforcing bars.

In February, the Department of Trade and Industry and the Department of Economic Development announced measures to support the industry from immediate threats. These measures included an increase in the general rate of customs duty on primary steel products and downstream support measures.