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Stainless steel industry body predicts decrease in demand

SLOWDOWN IN GLOBAL PRODUCTION Chinese stainless steel production more than tripled from 2008 to 2014, while production in the rest of the world grew only 3.7% in the same period

Photo by Southern Africa Stainless Steel Development Association

23rd October 2015

By: Kimberley Smuts

Creamer Media Reporter

  

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Stainless steel industry association the Southern Africa Stainless Steel Development Association (Sassda) predicts a 5% to 10% decrease in stainless steel apparent consumption for 2015, compared with last year, says Sassda chairperson Charles Cammell, who tells Engineering News that the decrease in industry consumption and primary local supply is a result of a decline in raw materials or commodity prices.

There has thus been a lack of investment in mining, for example, iron-ore and nickel mining, which has negatively impacted on stainless steel demand. There has also been an increase in “unfair” subsidised imports of finished products.

Sassda executive director John Tarboton notes that the stainless steel industry is favoured in China and, based on reports from the International Stainless Steel Forum (ISSF), Chinese stainless steel production more than tripled from 2008 to 2014, while production in the rest of the world grew only 3.7% in the same period.

He adds, however, that there has been a dramatic slowdown in global production in the first quarter of this year, with year-on-year global production increasing by only 0.1%, Chinese production contracting by 1.4%, and Western Europe and African production contracting by 7.3% collectively.

Sassda explains that the nickel industry drives the stainless steel industry, as two-thirds of all nickel mined and produced globally will make its way into stainless steel and, as a result of the low nickel price, which is expected to persist at least for the next 18 months, the price of stainless steel is expected to remain low throughout 2016.

Tarboton adds, however, that, despite a challenging economic environment locally and globally, Sassda aims to promote and market stainless steel and strives to grow the local stainless steel manufacturing industry.

Meanwhile, to provide accurate trade statistics, Sassda is creating a programme that monitors the amount of stainless steel finished product imports and exports.

“Once we have an accurate picture of the import statistics and how stainless steel products vary, we can start approaching government to implement specific trade remedies associated with those products. Further, once we know where the export volumes are, we can specifically target our promotional activity to the countries where our stainless steel exports are popular,” stresses Sassda technical adviser Ken Dewar.

Industry Opportunities
Sassda highlights the food-processing-equipment sector as a growth opportunity for the stainless steel industry, as African countries are increasingly relying less on the export of raw materials and rather focusing on local value-added processing and, therefore, require stainless steel food-processing equipment.

However, the biggest growth area for stainless steel worldwide is currently architecture, while the biggest perceived potential growth area is in structural applications.

Sassda tells Engineering News that stainless steel structural applications present opportunities in Japan and on the West Coast of the US, as earthquakes often occur in these regions and stainless steel is more resistant to earthquake shock loading.

Meanwhile, Sassda is partnering with the South African Institute of Steel Construction to create a joint stainless steel structural applications course, encouraging engineers to use stainless steel instead of carbon steel in certain appropriate structural applications.

“The use of stainless steel in structural applications is currently fairly low, even in Japan, which has a high per capita consumption of stainless steel than South Africa, though only 0.7% is used in structural applications, when this number should be around 3%,” notes Tarboton.

Demand for Training
Demand for skills development and training in the stainless steel sector has increased this year, with attendance at Sassda’s training programmes doubling, says Tarboton.

The association has designed its programmes around an interactive learning experience, which includes an e-learning introduction to stainless steel, as well as courses on the handling and fabrication of stainless steel. There is also a course on the fundamentals of stainless steel and an advanced stainless steel course.

“Some of our training programmes also focus on the architecture industry, as we regard building and architecture as having significant growth potential for stainless steel. We are, therefore, spending a lot of time and effort talking to engineering students and faculties at all the universities [in South Africa], as well as architecture associations,” says Dewar.

Sassda marketing consultant Gary Crawford adds, “Sassda has embarked on a strong engagement programme, whereby members and other important industry players, such as project houses, are visited regularly to keep them aware of industry developments. This complements the regular member meetings and other events held throughout the year.”

The most important thing is that Sassda ensures that all of their products and services add value to members’ lives and businesses. “This is the core of our drive to take Sassda to the next level,” notes Tarboton.

Stainless Steel Awards
Entries for Sassda’s stainless steel awards will open in the first quarter of 2016. The association has updated the competition categories to make it more relevant to the innovations that are being seen in the stainless steel industry. Entering the awards will be easier than before, with Sassda staff members doing all the paperwork after engaging directly with potential entrants.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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