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Follow on Google News | Recently released market study: South Africa Metals Report Q2 2011New Materials market report from Business Monitor International: "South Africa Metals Report Q2 2011"
As BMI forecast, South African crude steel output grew 13.3% to 8.48mn tonnes in 2010, although it is still far from the 2006 peak of 9.72mn tonnes. South Africa represented around half the total African crude steel output, with the other major producers located in North Africa. BMI estimates that hot-rolled steel output also grew 13.3% to 6.18mn tonnes. The year 2010 was one of two distinct halves, with a strong first half as input costs were contained. Significant restocking in the market was followed by rapid rises in raw material prices and electricity costs and deteriorating demand conditions which, along with a strengthening rand, squeezed margins. Towards the end of the year, producers were struggling to compete both on export markets and domestically. Raw materials as a proportion of total production cost increased from one-third to two-thirds as iron ore prices doubled in 2010. This has prompted AMSA to integrate its activities upstream to secure its position as a low-cost producer and compete with producers in Asia. Another threat to South African steel-making margins is the strength of the rand, which is particularly troublesome as recovery in output will be export-led with domestic markets not expected to return to the 2006 peak until 2013. ArcelorMittal South Africa's (AMSA) shutdown of its Newcastle blast furnace in December 2010 caused a tightening of the local market that, due to long lead times, could not be plugged with imports. The furnace was restarted in January, but AMSA said delays in supply caused by the shutdown would be not be fully resolved until April. The South African Reinforced Concrete Engineers Association (Sarcea) warned that there was a serious shortage of rebar and mesh rod due to the closure of the Newcastle furnace, which was exacerbated by the closure of Murray & Roberts' Cape Town Iron & Steel Works (Cisco) in late 2010. There are downside risks to the industry's long-term health, notably government regulation. In Q111, AMSA claimed that the government's proposed carbon tax policy could have a devastating effect on its finances. The carbon tax discussion paper, published in December 2010, would have cost the company - which was seeking to create a joint industry response to the proposals - 50% of EBITDA for 2010 in carbon tax. According to the government, the policy will address climate change by raising the cost of carbon-emitting production, thereby influencing consumer and producer behaviour. Three proposals have been outlined: a direct tax on actual measured emissions; a fossil fuel input tax based on carbon content of fuels; and an output tax that could be applied to emitters where fuel was burnt. AMSA, South Africa's leading steelmaker, remains in arbitration proceedings relating to its stake in Kumba's Sishen mine. It is in conflict with Anglo American subsidiary Kumba Iron Ore over iron ore prices. It is also attempting to buy mining firm Imperial Crown Trading (which won a prospecting right to a stake in Kumba's Sishen mine), as well as acquiring mining rights to bring down ore costs. For more information or to purchase this report, go to: - http://www.fastmr.com/ Report Table of Contents: SWOT Analysis - South Africa Political SWOT - South Africa Economic SWOT - South Africa Business Environment SWOT Global Market Overview - Steel Forecast - Table: BMI's Steel Forecasts - Table: Steel Prices (US$m/t) Commodities Forecast - Commodity Strategy - Metals Update - Aluminium - Copper - Lead - Nickel - Tin - Zinc - Gold Africa Overview - Steel - Aluminium - Table: Aluminium Smelters In Africa Forecast Scenario - Table: South Africa's Metals Industry, 2008-2015 ('000 tonnes unless stated) - Macroeconomic Forecasts - Table: South Africa - Economic Activity, 2008-2015 Competitive Landscape - Table: ArcelorMittal's Steel Mills In South Africa Company Profiles - BHP Billiton Global Assumptions, Q211 - Table: Global Assumptions, 2009-2015 - Table: Regional Real GDP Growth, 2010-2013 (% change y-o-y) - Table: Selected Exchange Rates, 2010-2013 (average) - Developed States - Table: Developed States' GDP Growth, 2010-2013 (% change y-o-y) - Emerging Markets - Table: Emerging Market's GDP Growth, 2010-2013 (% change y-o-y) - Consensus Forecasts - Table: Consensus Forecasts, 2011 And 2012 Country Snapshot: South Africa Demographic Data - Section 1: Population - Table: Demographic Indicators, 2005-2030 - Table: Rural/Urban Breakdown, 2005-2030 - Section 2: Education and Healthcare - Table: Education, 2002-2005 - Table: Vital Statistics, 2005-2030 - Section 3: Labour Market and Spending Power - Table: Employment Indicators, 2001-2006 - Table: Consumer Expenditure, 2000-2012 (US$) - 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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