South African steel manufacturing company, Veer Steel Mills, provided insights on a recent study initiated by South Africa’s Minister of Trade, Industry, and Competition, Ebrahim Patel, to tackle the adverse growth rate of the domestic steel industry through possible solutions.
The Johannesburg-based steel manufacturer said in its note that the global impacts from COVID-19 have negatively influenced the local steel segment that was already struggling, prior to the pandemic. However, the company believes that existing collaboration in the steel industry will make needed adjustments in response to the current market conditions.
Improved performance can be accomplished by procuring supplies locally, which will lead to necessary recovery. South Africa currently relies only on imports for most products and raw materials for steelmaking, creating an imbalance in the local market. The country also relies on exports of ferrous scrap metal which may be detrimental to the local scrap industry.
A spokesperson for Veer said the South African government was actively supporting raw prime finished steel production. For the past several years the department of trade, industry, and competition has taken on work to reinforce the steel sector, which has led to some reduction in imports that rival local production.
However, another problem for the steel industry relates to the lack of funding for local manufacturing which creates further need to import various products. This may be addressed through an added promotion of domestic steel production and local buying, the spokesperson said.
According to its note, Veer expects additional, strong procurement policies that will sponsor the domestic market. The local activity at present has moved at a slow rate and is unable to tackle the needed economic changes cited in the study.