It is no secret that the lockdown regulations in South Africa, caused by COVID-19, has affected small business owners to such an extent that they are fighting for survival. One of the industries that got hit the hardest is the steel and manufacturing industry. A severe steel shortage is affecting many small businesses that will have to close their doors if the situation does not drastically improve.
The main reason for the shortage is that Arcelor Mittal South Africa (AMSA) ceased operations at all its blast furnaces as required by South Africa’s lockdown regulations, as laid out by the government. The company completely stopped production for the first time in the history of the integrated steel industry in the country, according to Tami Didiza, Group Manager of Stakeholder Engagement and Communications at AMSA.
This resulted in an immediate disruption of the whole steel supply chain, creating backlogs and depleting inventories at every stage of the supply chain. The increasing demand was consuming everything AMSA was producing, making it a wild goose chase to find and acquire stock. This shortage also resulted in a major price hike of more than 30% with supply and demand being the main reason behind the hike. This squeezed even more air out of small business owners as they had to adjust their prices leading to customer dissatisfaction and in some cases loss of clientele.
However there seems to be some light at the end of the tunnel as AMSA announced that they have restarted all operations at the largest steel plant in in Africa, the Vanderbijlpark plant, and has returned to full production to repair the supply chain and work through the backlogs.
As a small family business, we can only hope that this day will come sooner rather than later, so that we can continue to provide you with the best quality products at affordable prices.