SA firms envy Zim’s Manhize plant impact
STAFF REPORTER
The neighbouring South Africa’s steel industry is worrying and strategizing over the impact to their local industry brought in by Dinston Iron and Steel Company in Zimbabwe’s Manhize area with experts saying policy uncertainty in Pretoria is hampering growth.
Secretary general of the South African Iron and Steel Institute, Charles Dednam, said there was a lot of uncertainty regarding policy in the industry adding that demand also remain subdued.
“I think policy uncertainty is maybe one of the prime things that’s hampering the steel industry at this stage,” he said.
“Demand is very subdued. So we will be seeing about a 13% drop in demand, measured against last year and we will still be looking at about 30-plus percent imports of total steel demand, which is actually leaving quite a small amount for the local steel mills to supply into the local market.”
“So it’s not only that the demand is falling back, it is also pressure on prices as the imported product is coming in at very competitive prices. So, to actually stand your chance to supply the market, you have to be competitive in this particular market,” he added.
Dinson Iron and Steel Company with its parent Chinese firm are poised to become the largest stainless steel or one of the largest stainless steel producers in the world according to South African experts.
Dednam added “I think the biggest challenge for the steel sector at this point in time is to move away from commodities and actually to start adding value to the steel product itself.
“If one looks at the Dinson steel mill, it’s actually just filling the gap in the SADC region – and to a significant magnitude. So although they’re currently producing 600 000 tons, the end state will be about 3.5 million tons that they will be supplying into a current market that is about eight million tons in demand in SADC, with the South African productive capacity at 8.8 million tons. So it’ll just add to the surplus capacity in this region.”
“So the only way that you will actually be safeguarded against the commodity trade in the country is to focus on value-add, to do the more sophisticated product lines and to go further downstream in the production of steel,” he said.
