The local stainless steel industry is taking strain because of cheaper imports from China while also battling domestic factors such as high labour costs and rising electricity prices, the Southern African Stainless Steel Development Association (Sassda) says. 

This compounds the effects of the recent imposition of a 25% trade tariff on imported steel in the US. SA was one of the countries whose exports to the US increased significantly from 2011 to 2017. 

As a result, steel flat products, steel long products and steel pipe and tube products were subject to the 25% tariff. Sassda said the move would severely affect exports of flat rolled stainless steel.

Sassda executive director John Tarboton said the hostile global trade market has raised the need for a strong local market, thus reducing local producers’ reliance on exports.

SA produces about 500,000 tons of primary stainless steel a year and imports another 40,000 tons a year. Local stainless steel consumption is about 150,000 tons a year, according to Sassda. Tarboton said Chinese imports are cheaper because of a number of factors, including the use of automation, six-day work weeks, higher productivity and subsidies. As a result, SA producers could not compete with the imports on price. 

The China factor also had a key role to play in the recent imposition of a 25% tariff on SA stainless steel imports into the US market.