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South African steel production is continuing its recovery after a fire at the Vanderbijpark basic oxygen furnace (BOF) plant of ArcelorMittal SA (AMSA) in February 2013 caused a major disruption.
The BOF plant was returned to service in April 2013 and this allowed annual production to rise by 4 per cent in 2013. This followed a 8 per cent reduction in 2012 to only 6.9 million tons, its lowest annual production since at least 1980. South African steel production is expected to return to the levels of the years 2002 to 2007, when annual production was above 9 million tons, in part driven by a growing vehicle export programme.
Steel is considered a key input to industries such as the automotive, construction, rail, power, consumer durable goods and machinery sectors, so its health or lack of thereof, is used as a leading indicator by economists.
Brazilian steel production rose by 1.2 per cent in February to 2.6 million tons from a year ago, while Russian production declined by 3.1 per cent to 5.3 million tons. Indian steel production fell by 3.2 per cent to 6.3 million tons, while Chinese steel production, which accounts for slightly less than half of global steel production of 125 million tons, was up only 0.4 per cent to 62.1 million tons.
South African Finance Minister Pravin Gordhan told The BRICS Post earlier this month that South Africa is not headed for recession despite a challenging global economic environment, and the first national power black-outs since 2008.
Gordhan reduced the government’s real gross domestic product (GDP) growth forecast to 2.7 per cent for 2014 from the 3 per cent forecast earlier, but this is better than the actual increase of 1.9 per cent in 2013.
Helmo Preuss for The BRICS Post in South Africa