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- The return of construction projects that were halted during the lockdown is expected to boost demand for steel in South Africa.
- ArcelorMittal, Africa’s largest steel producer, intends to restart its idle blast furnace at Vanderbijlpark next year.
- The group supplies more than 60% of the steel used in South Africa.
Steel producer ArcelorMittal South Africa says it will resume production at its Vanderbijlpark plant in January 2021 after it cut production due to a drop in demand following the Covid-19 shutdown.
In July, the company announced that it would temporarily halt the furnaces at Vanderbijlpark and Vereeniging until demand for steel recovered.
The restart of the second blast furnace at its Vanderbijlpark site in January next year will add around 600,000 tonnes of additional flat steel to its annual production volume. This is the minimum that can be added by restarting the additional oven.
The return of some construction projects that had been affected by the closure, as well as the improvement in sales at retail outlets were some of the short-term factors that resulted in an increase in demand for steel “to a faster pace than originally anticipated, “ArcelorMittal said.
“The Covid-19 pandemic has had a significant impact on the South African economy in addition to growth that was already in decline before the shutdown,” said CEO Kobus Verster.
“Now more than ever we must take decisive action to protect the national economy and ensure that South Africa can move on a sustainable path of growth and development.”
ArcelorMittal is the largest steel producer in Africa, supplying more than 60% of the steel used in South Africa. It has operations in Vanderbijlpark, Vereeniging, Saldanha and Newcastle. In February, the group announced that it had incurred a loss of R4.68 billion for the year to December 31, 2019, due to a recession in global steel production.
Local demand for steel was already at its lowest level before the close of the Covid-19 pandemic in March, which also affected exports as governments around the world implemented measures to contain the spread of the virus.
