South African Steel Industry in Crisis

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As described by experts in steel industry report, 2017 is the tough year for the steelmaking industry because of the decline of China’s demand for the alloy and increase of exports to foreign markets, all of which have dragged down the global steel price.

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The Southern African Stainless Steel Development Association (SASSDA) has revealed that “imports of finished stainless steel products into South Africa surged by 44% in 2016. In comparison, the export of finished products dropped by 20%.” It is undeniable that the South African steel industry is under severe threat.

Main issues of South Africa’s steel industry:

  • Insufficient funding

Government support is significant to the iron and steel industry, especially for the refineries.

As a country with fiscal deficit, there’s no more margin to increase investment specifically for steel industry. It is prevalent that in South Africa, some cash-strapped companies can’t expand company scales up to date, and new projects are forced to be delayed.

  • Over-reliance on raw material and capital goods import

In the last two years the iron alloy and sponge iron parts of African countries are relying on imports. Due to the short material supply, production of the product is often interrupted. Therefore, South Africa is running a trade deficit on stainless steel finished products.

  • Sales problem

Low consumption, weak domestic market and uncompetitive export, all these factors obstruct the healthy development of iron and steel industry in many African countries.

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There is no doubt that the industry is under severe threat, and it is vital for South Africa’s present and future economic stability to revive South African steel production. It’s time to take drastic steps. Nowadays, e-commerce companies continually bring forth new ideas in more powerful functions of their platforms, in order to meet the growing demands of customers for ultra-convenience and survive in increasing competition.

Iron and steel industries can take the opportunity to cooperate with those in Africa by using e-commerce or other methods. On this basis, JumreGlobal, as a B2B e-commerce platform, has specialized platforms of iron and steel industry which can help its users get in touch with more industries. Every challenge contains within it the seeds of opportunity, while JumoreGlobal helps maximize your opportunity.

 

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