Asian imports putting industry under pressure

Anotable increase in welded small-bore tubes and seamless pipes from Asia is exacerbating the pressure which South Africa’s steel tube and pipes industry has been under during the past three years, says Association of Steel Tube and Pipe Manufacturers (ASTPM) executive director Keitumetse Moumakoe.

“Some companies have had to restructure their tube division operations in response to a depressed market, such as steel tube manufacturers Macsteel Tube & Pipe and Aveng Trident Steel.”

Other factors that contribute to the state of the industry are the no-bound rate import tariff protection for small- bore steel tubes; the high cost of electricity for manufacturers; high port costs that hinder export efforts; a lack of government infrastructure roll-out and spend, which has resulted in the demise of several notable JSE-listed construction companies; and a strained value relationship between the upstream steel tube and pipes industry and the downstream industry, Moumakoe points out.

“However, we remain positive for the future of the industry, buoyed by a localisation and designation drive that the ASTPM is spearheading with the help of the Department of Trade and Industry (DTI). This should result in more local material inputs as opposed to imported material in future government infrastructure projects.”

In mitigating the challenges that the steel industry faces, he urges South African small-bore steel manufacturers to submit individual reports to the International Trade Administration Commission of South Africa (Itac) displaying evidence that attests to local companies’ and industry’s struggling to maintain local capacity because of imported steel tubes.