SA steel producers under pressure from China, India and Brazil

The growing West African
oil, gas and mining
industry presents major
opportunity for South African
companies.
With an increased need for
the supply of equipment and
services from commencing
exploration till the finished
product hits the shelf, there are
also still niche products moving
into West Africa, according to
Mark Day, MPV manager for
Safmarine in South Africa.
“However, the strong rand has
affected the quantity of these
shipments and other various
commodities being exported,
and until we see this trend
change, exports will remain well
below par,” he told FTW.
Safmarine, he said, continues
to serve shippers for cargo
between South and West Africa
with its monthly scheduled
MPV services, deploying the
12000 DWT vessels Safmarine
Onne and Safmarine Linyati.
“On the southern Africa-West
Africa route, base load cargoes
such as bagged salt, cement,
fertiliser, grit, soda ash and
chemicals are supplemented by
increasing demand from the oil
and gas industry and suppliers
of rolling stock machinery for
the mining industry,” said Day.
“In containers for the retail
sector the picture is mixed, with
shipments of anything from cars
to printing material to canned
and electrical goods. There is
still also a steady flow of Aid
cargo.”
The normally buoyant
northbound steel trade has
however been flat for a number
of reasons.
Said one Safmarine customer
who preferred to remain
anonymous: “Over the past
three years five mills in the
Congo have shut down, which
has seen a significant decrease
in demand, compounded with
the opening of several “minimills”
in West Africa which
have been using their own scrap
steel supplies to produce rebars
– a commodity which South
Africa was exporting.”
According to the customer,
China, India and Brazil are
now being seen as favourable
suppliers to West Africa due to
their competitive pricing, which
has put South African producers
under pressure.
“In the past South Africa
has grown when China has
implemented its steel export
tax. However the local demand
in China is currently relatively
low and the tax has been
lowered. At some stage this will
change with a corresponding
impact on South African
exports.”