Steel company ArcelorMittal South Africa (AMSA) has welcomed the announcement by President Cyril Ramaphosa that the country will be moving to Level 3 in the risk-adjusted approach to the easing of the nationwide lockdown.
At Level 3, AMSA will be able to operate with 100% of its workforce, but the company will only fully restart operations as the demand for steel becomes visible in the order book.
“The health and safety of our employees remains a priority and we used the lockdown period to ensure that the necessary measures are in place, according to national health protocols and World Health Organization (WHO) guidelines, to safeguard our employees as they return to work,” CEO Kobus Verster said in a statement on May 25.
Since returning to work on May 4, the company has restarted dispatches and most rolling mills are operational again as the focus has been on meeting existing orders.
Available finished stock and work-in-progress are sufficient to support delivery of confirmed orders to the end of June.
Beyond that, fresh liquid steel will be produced to service demand.
In the interest of employee safety, most office and support staff will continue to work from home at Level 3.
Dispatches were restarted on May 6, while most rolling mills are operational at varying level of use. In terms of coke batteries, 45% of capacity is operational, while the electric arc furnace in Vereeniging restarted on May 12.
In Vanderbijlpark, the process to restart one of the two blast furnaces will begin on May 25, while the timing of the restart of the second blast furnace will depend on how quickly steel demand and the economy recover.
The blast furnace in Newcastle will restart at the beginning of June and, given the preparations already made during the initial lockdown period, the restart should be relatively quick.
At Level 3, more of AMSA's customers are expected to reopen which the company believes “should result in an increase in demand”.
However, the reality is that no industry has remained untouched by the pandemic and it is likely that it will be many months, if not years, before the economy starts to revive and the demand for steel begins to grow again, the company lamented.