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Follow on Google News | New Market Research Report: South Africa Metals Report Q4 2010New Materials research report from Business Monitor International is now available from Fast Market Research
In the first seven months of 2010, the South African steel industry reported crude steel output at 4.88mn tonnes, up 21.7% y-o-y. The industry bucked the global trend, with monthly output steady throughout 2010 and climbing to 720,000 tonnes in July, the highest level since the financial crisis hit in late 2008. South Africa represented 52.4% of total African crude steel output with the other major producers located in North Africa. However, BMI does not expect a significant improvement in monthly output above 720,000 tonnes over the rest of 2010, with rising domestic electricity prices and a strongly priced rand undermining competitiveness in the South African metals industry. BMI forecasts annual output of 8.44mn tonnes in 2010, an increase of around 14.5% and 0.5 percentage points up on the previous quarter as a result of the slight downward revision in 2009. This should reverse most of the losses of 2009, although overall capacity utilisation rates are still low and margins are poor. However, it will take until 2014 before the South African steel industry approaches the 2006 peak of 9.72mn tonnes, with BMI forecasting output of 9.71mn tonnes. The recovery in steel output will be spurred by inventory restocking, growth in demand in African markets and growth in domestic steel consumption - particularly from the automotive sector, which is expected to grow on the basis of a 32% rise in exports. However, BMI is forecasting that South Africa's construction industry growth will decline substantially in 2010 from the double-digit highs experienced over the previous five years, bringing longs production down with it. From an average of 14% y-o-y between 2005 and 2008, and an estimated 9.4% in 2009, growth in the construction industry is expected to slow to 5% in 2010 and to remain at below 3.5% per year over the remainder of our forecast period to 2014. The main reason behind this is the anticipated slowdown in construction following the conclusion of the FIFA World Cup. Major challenges to growth remain. Access to raw materials is also a long-term concern for South African producers. Iron ore reserves are depleting, while power shortages and labour unrest continue to disrupt mines. In the short term, steel suppliers will face cash-flow problems and will be focused on merely treading water. This will limit capital investment in new capacity and we do not expect major increases in capacity until H211 at the earliest. Steel prices will rise, not as the result of any significant tightening of the market but because of cost pressures, notably raw materials and electricity. These factors will be a major hindrance to growth over the medium term, particularly if the proposal for a 35% increase in electricity prices over the next three years goes ahead. The price hike will raise costs at EAFs and smelters as well as the costs of manufacturers down the production chain and buyers in end markets. A factor sure to hinder production in South Africa is the current energy crisis hitting the state's energy provider, Eskom. While the provider is coming under increasing pressure to meet energy demands, utilities in key aluminium-producing regions like Russia are generating electricity from relatively lowcost hydro sources. This, coupled with low operating costs at sites in regions such as the Middle East, have further hindered the South Africa's chances of making an impact upon the aluminium market, especially in the short term. For more information or to purchase this report, go to: - http://www.fastmr.com/ Report Table of Contents: Executive Summary SWOT Analysis - South Africa Political SWOT - South Africa Economic SWOT - South Africa Business Environment SWOT Global Market Overview - Table: World's Top 10 Steel Producing Countries - Table: Recent And New Smelter Capacity Commodities Forecast - Nickel - Table: BMI's Nickel Forecasts - Table: Nickel, 2005-2011 - Aluminium - Table: BMI's Aluminium Forecasts - Table: Aluminium, 2005-2011 - Copper - Table: BMI's Copper Forecasts - Table: Copper, 2005-2011 Regional Overview - Africa Overview - Steel - Aluminium - Table: Aluminium Smelters In Africa Forecast Scenario - Table: South Africa's Metals Industry, 2007-2014 ('000 tonnes unless stated) - Macroeconomic Forecasts - Table: South Africa - Economic Activity Competitive Landscape - Table: ArcelorMittal's Steel Mills In South Africa Company Profiles - BHP Billiton Global Assumptions - Q4 2010 Update - Table: Global Assumptions - Table: Global & Regional Real GDP Growth - Table: Consensus Forecasts - Table: Developed States, Real GDP Growth Forecast - Table: Emerging Markets Aggregate Growth Country Snapshot: South Africa Demographic Data - Section 1: Population - Table: Demographic Indicators, 2005-2030 - Table: Rural/Urban Breakdown, 2005-2030 - Section 2: Education and Healthcare - Table: Education, 2002-2005 - Table: Vital Statistics, 2005-2030 - Section 3: Labour Market and Spending Power - Table: Employment Indicators, 2001-2006 - Table: Consumer Expenditure, 2000-2012 (US$) - Table: Average Annual Wages, 2000-2012 BMI Methodology - How We Generate Our Industry Forecasts - Cross Checks About Business Monitor International Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at http://www.fastmr.com/ About Fast Market Research Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156. # # # Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. End
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