The steel tube and pipes industry has recovered well from the 2008 economic recession and, overall, 2011 has been a good year for the industry, despite there being some overcapacity with imports from the Far East negatively impacting on the local market, reports the Association of Steel Tube and Pipe Manufacturers (ASTPM) of South Africa.
ASTPM of South Africa executive director Colin Shaw says imports of finished steel tube and pipe products from the Far East are increas- ing yearly, resulting in market share loss, with resultant unemployment occurring.
“Too many imports are coming in from the Far East and people opt for these cheaper products, even though they may be of lower quality,” he says.
Shaw states that the situation is a warning, as imports from the Far East will result in deindustrialisation and significantly contribute to unemployment and skills loss.
The tube industry is concerned that this situation will result in a reduction in domestic demand and says downstream market development will be directly affected and will put the full supply chain under pressure.
Antidumping legislation, which prevents a company or country from exporting products at lower prices than it normally charges on its own home market, might be a solution for South Africa, as all industries are affected by dumping, suggests Shaw.
He points out that the US and the European Union have successfully implemented such legislation in the finished steel tube and pipe products sector.
“We need to recognise that South Africa does not have any nontariff barriers, which makes importing easier, and we need to identify which products are threatened by imports,” he highlights.
The association has established an Import Replacement Programme, which aims to improve the competitiveness of those local manufacturers who have registered to be part of the programme.
Further, the ASTPM is, through the Steel Tube Export Association of South Africa (Steasa), which is also led by Shaw, focusing on helping local steel pipe and tube manufacturers increase product exports.
Owing to global economic uncertainties and the globalisation of markets, the buying behaviour of traditional and well-established markets has changed, explains Shaw.
“It is now difficult for manufacturers to export their surplus product; therefore, we need to investigate and focus on value-added products to ensure that South Africa strengthens its position in the market. Value-added finished products have the potential to grow in established markets,” he notes.
The ASTPM and Steasa have started a Value-Added Export Programme, which aims to assist manufacturers in diversifying their export portfolios and increasing export figures.
Meanwhile, the education of consumers is another priority for the association.
It is committed to informing buyers about the SABS 62 stamp for water pipes, it reports.
“Galvanisers’ reputations have been negatively impacted on by poor-quality pipes entering the industry and, by informing users to look for the SABS 62 stamp of approval on water pipes before purchasing them, we can eradicate the use of low-quality galvanised pipes.
“A number of our members have invested in specialised laser and plasma cutting equipment aimed at adding value to pipe and tube products, thereby making it easier to handle. This new technology makes the fabrication of pipes and tubes much cheaper and easier to assemble. The aim is to increase the market share of pipes and tubes in steel building construction,” says Shaw.
In addition, the association, in partnership with the Southern African Institute of Steel Construction (SAISC), will, next year, release a new edition of its Southern African Structural Hollow Sections Handbook, which provides engineers with design information for tube, including design recommendations as well as connections and fabrication guidelines.
The SAISC is also working on a publication on methods of connecting steel.