http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.17Change: -0.01
R/$ = 10.54Change: -0.02
Au 1292.92 $/ozChange: 2.17
Pt 1473.50 $/ozChange: 4.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Feb 10, 2010

Restocking to drive steel demand recovery in Q1

Back
ArcelorMittal South Africa CEO Nonkululeko Nyembezi-Heita in conversation with Terence Creamer about the outlook for the steel market in South Africa. Camera Work and Editing: Darlene Creamer.
Construction|Africa|Packaging|Africa|Brazil|China|Germany|South Africa|United States|Automotive|Gross Domestic Product|Packaging|Steel|Steel Demand|Transport|Nonkululeko Nyembezi-Heita
Construction|Africa|Packaging|Africa||Automotive|Packaging|Steel|Transport|
construction|africa-company|packaging-company|africa|brazil|china|germany|south-africa|united-states|automotive|gross-domestic-product|packaging|steel|steel-demand|transport-industry-term|nonkululeko-nyembeziheita
© Reuse this



The medium-term outlook for South African steel demand remained uncertain, but ArcelorMittal South Africa expected first quarter sales to rise by between 15% and 20% relative to the fourth quarter of 2009, on the back of anticipated restocking, as well as some fundamental demand growth.

However, prices would probably remain flat for the remainder of the quarter, with the JSE-listed group having kept its prices stable for the past three months.

Any recovery would also be off a low base, with total dispatches having fallen 12% to 4,5-million tons in 2009, and with high-margin domestic consumption having fallen to 69%, or 3,1-million tons from 4,4-million tons in 2008.

The decline in sales volumes and prices (some of which declined by over 60% from the records achieved in the first half of 2008) resulted in a dramatic change of fortunes for the company in 2009.

Its year-on-year headline earnings descended in to loss of R440-million for the year ended December 31, 2009, compared with a record profit of R9,5-billion in the previous financial year.

Merchant inventory levels were currently estimated at about eight weeks, as compared with a historical average of ten weeks, while end-user stocks were closer to the four-week level.

Therefore, CEO Nonkululeko Nyembezi-Heita said that there was definitely room for replenishment, but warned that consumers remained cautious, following the ructions of 2009, and that this restocking would probably be "slow".

She said it was also difficult to be definitive about underlying demand, indicating that visibility would probably only begin to emerge from the second quarter.

"Steel use will be a leading indicator . . . so we could see the underlying demand coming through even before it hit the gross domestic product (GDP) numbers," she added.

The company was forecasting a 2,5% rise in South Africa's GDP for 2010, following the country's first recession in 17 years, and was particularly bullish about packaging and construction sector growth.

In fact, it expected the packaging sector to expand by 13,6% during the year and that the building and construction market would grow by 11,7%.

Manufacturing growth had been pegged at 4,8% for 2010, but the group was less bullish about transport- and automotive-sector growth rates, estimating these at 3,3% and 1,3% respectively.

The pricing outlook, meanwhile, would depend materially on the direction of the South African rand, which had emerged as one of the top-three performing currencies in 2009, after the Brazilian real and the Australian dollar.

Indeed, its decision to hold prices into February was based on the fact that the stronger rand was balancing out the effect of rising international steel prices.

The company sets its prices after analysing domestic selling prices in four markets (the US, Germany, Brazil and China) and then adjusting these to its expectations for the South African currency for the forthcoming month.

 

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines
 
 
 
 
 
 
 
 
Other Metals News
Economic Development Minister Ebrahim Patel
Economic Development Minister Ebrahim Patel says government will be prioritising six ‘I’s as part of its “radical economic transformation” agenda for the coming five years. Delivering his Budget Vote in Parliament on Tuesday, Patel said the six components...
South African crude steel production declined by 4.7% year-on-year in June to an estimated 590 000 t, falling behind the 3.1% average production uptick of the 65 countries reporting to the World Steel Association (worldsteel) in the same month. As a collective, the...
The Vanderbijlpark plate mill, which is to be upgraded
Steel producer ArcelorMittal South Africa (AMSA) reports that it is planning an upgrade to its plate mill at Vanderbijlpark in quarter four 2014, which will enable it to produce heavy plates of up to 11 t for South Africa’s emerging wind-tower manufacturing...
More
 
 
Latest News
Roberto Azevêdo
Updated 37 minutes ago World Trade Organisation (WTO) director-general Roberto Azevêdo assured the organisation’s General Council on Thursday that trade will continue to be a focus in the post-2015 Development Agenda, with a primary goal being the achievement of a “significant”...
Updated 53 minutes ago Global revenues from solar energy operations could double from $59.84-billion in 2013 to $137-billion in 2020, new analysis from Frost & Sullivan shows. The consultancy’s ‘Global Solar Power Market’ report says the total global installed solar photovoltaic (PV)...
The 2005 Nuna 3
Updated 1 hour 8 minutes ago The biennial Sasol Solar Challenge will kick off on September 27, in Pretoria, and end in Cape Town, on October 4. Fourteen teams will take part, of which eight are local, says race project manager Annalie van Vuuren.
More
 
 
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
 
 
 
 
 
This Week's Magazine
Multinational semiconductor chipmaker corporation Intel announced its national campaign to further acquire partners to drive its She Will Connect programme, an initiative that aims to expand digital literacy skills to young women in developing countries, further into...
South Africa's MeerKAT radio telescope array programme should get back on schedule within a few months. This assurance has been given by SKA South Africa (SKA SA) associate director: science and technology Prof Justin Jonas. Early last month, Science and Technology...
The Passenger Rail Agency of South Africa’s (PRASA’s) Metrorail service will remain a subsidised service following its current multibillion-rand rolling stock, station, depot and signalling upgrade programme. PRASA group CEO Lucky Montana has allayed fears that...
GARYN RAPSON Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will open the door for court battles to determine who will be held liable for the remediation
The uncertainties around the remediation of affected areas as addressed in the Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will possibly spark litigation and disputes between landowners and businesses, contractors...
South Africa is currently the largest component of the African Development Bank’s (AfDB’s) active portfolio in Southern Africa, comprising 62.5% of the bank’s $7.9-billion exposure to the 12-country region – the second largest beneficiary is Mauritius, which...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks