ArcelorMittal South Africa’s (AMSA’s) liquid steel production increased by 5.9% to 71 000 t in the three months ended March 31.

The higher output was mainly owing to higher production at its Vanderbijlpark Works and Saldanha Works, which was partly offset by lower long products output following some instability in the iron-making process.

The capacity utilisation for the first quarter of 2018 increased to 85%.

Local sales were, however, 2%, or 17 000 t, lower, mainly owing to the lower local demand for flat products as a result of low economic activity in South Africa.

In addition, total imports of primary steel products decreased by 20% year-on-year, as a result of safeguards, a weaker local market, high stock levels and increased production.

Imports of galvanised products, however, increased by 14%, while total imports of products containing steel for the period increased by 8% year-on-year, which was mainly driven by imports of low standard thin gauge products which are not produced locally.

Standards in the low-cost informal roofing market are necessary to mitigate this influx, the steel producer stated.

Imports of tube and pipe also increased by 34%, thereby highlighting the need for trade protection measures for the downstream industry.

Meanwhile, export sales increased by 33.2%, or 82 000 t, with flat steel product sales higher by 58 000 t and long steel product sales by 24 000 t.

AMSA noted that the strong international demand was muted by the strengthening of the rand against the dollar.

Commercial coke sales were 2.2%, or 1 000 t, lower, while tar sales were higher by 10%, or 2 000 t.

As for the upcoming second quarter, the company believes local sales will continue to be under pressure owing to tough trading conditions, but expects flat product volumes to increase following the potential upside from renewable-energy and other projects.

Export sales will also be higher owing to better international prices.