Sassda questions why SA stainless steel not first choice for local projects

Creating increased demand for South African stainless steel within key sectors such as mining, automotive and food and beverage is a key area of focus for the Southern Africa Stainless Steel Development Association (Sassda) in 2023. This was the view of Sassda Executive Director Michel Basson in a recent webinar on the ‘State of the Stainless Steel Nation’ where he provided a comprehensive local and global overview of the sector.

Basson stated; “The local industry is well-positioned to supply African markets with a variety of world-class stainless-steel products that can rival other global competitors. This presents significant opportunities for local fabricated products including industrial capital equipment for mining, agricultural applications, food processing and health applications,”.

Sassda has therefore put measures in place to strengthen the industry, provide access to new opportunities and capacity in other sectors, and stimulate local demand.

Basson elaborated; “Local demand can also be stimulated through the designation of local products in infrastructures at all government levels. We see many projects where there’s a definite contract requirement for 100% local supply; these companies require exemption from the dtic.”

Punting the use of local stainless steel

In pursuit of its mandate, Sassda is also exploring opportunities to replace numerous applications where galvanized metals are currently being utilised with 3CR12, the world’s most specified 12% chromium utility stainless steel. Sassda has various partnerships in place to facilitate localisation in industries such as food and beverage, medical, automotive, cutlery, travel, and containers in multiple countries, providing a range of opportunities for the local stainless steel market.

Sassda has also been assisting with evaluating various government-funded projects and has seen definitive growth in municipal undertakings in certain provinces. “Unfortunately, we are currently constrained by a number of restrictions; however, we are working on these together with our private partners via the Steel Masterplan.”

This type of engagement with government forms part of Sassda’s broader mandate of engaging in key lobbying efforts for its members. For example, Sassda was able to lobby the dtic to exclude stainless steel from the recently announced ban on scrap export regulations.

A global view

Basson also provided a broader view of the current state of the stainless steel sector globally and locally. He reported that despite various global issues over the past few decades, stainless steel has maintained a steady annual compound global growth rate of 5.8%, which is more than double the growth rate of copper, and 30% more than aluminium. He also highlighted the fact that between 2005 and 2021, China experienced rapid growth in stainless steel production, while South Africa remained stable at approximately 13% of global production.

Basson stated; “Locally, the COVID-19 pandemic significantly impacted the industry over the past three years, resulting in a negative trend in local production and export shrinkage in 2022. Nevertheless, the South African stainless steel industry is still regarded as a world-class supplier. The sector displayed remarkable resilience in bouncing back from the pandemic-induced restrictions.”

The power crunch

Locally, stainless steel production and fabrication are currently facing their biggest hurdle to date: loadshedding. This challenge overrides all previous issues, as the total loadshedding hours have already exceeded those of 2021 and 2018-2019 combined. The effects of loadshedding include diminishing staff safety, motivation, productivity, and increased living costs, contributing to a visible decline in apparent consumption during 2022. The South African Reserve Bank has identified this as a huge future risk that could result in social unrest, straining socio-economic stability.

“But we need to be optimistic about the future, and this is possibly the time to rethink what we do and how we do it. The energy issue might be an opportunity to make the industry more energy efficient and less energy dependent,” says Basson.

Enhanced access

Against the backdrop of these challenges, Sassda’s focus has been on adapting its processes by providing enhanced tools to facilitate easier access to its members’ stainless steel products, together with the expansion of the association’s education and training programmes. This training includes several accredited CPD presentations that can also be customised.

Sassda also offers a broad range of tools for every level; those relevant to government, partners, the broader industry, and even to non-technical consumers. These tools provide technical advice and guidance.

Basson concluded; “Despite challenges facing the industry, Sassda is optimistic about the future of the South African stainless steel sector, and based this optimism on our industry’s cohesive ‘strength in numbers’. With these collaborative efforts and the resilient nature of our industry, we remain a strong global competitor in 2023.”

To find out more, watch the full webinar here or email to find out more.