South Africa: Evraz Highveld Steel and Vanadium has temporarily ceased steel production at its steelworks, citing working capital constraints and reduced domestic demand mainly owing to a 'significant' increase in steel imports from China.
Evraz said in a statement that it was currently communicating with its employees and it intends to resume production once adequate funding has been secured and steel trading conditions have improved to ensure the company's sustained future financial viability.
The decision to halt production at the company's iron-making division was brought about by delayed debtors payments, inadequate cash to procure the required raw materials to continue with manufacturing operations, difficulties experienced with access to funding and a continued inability to pay major creditors on time. The company added that the feeding of raw materials into the iron-making kilns had been halted to enable the furnaces to be safely drained and switched out, ready for a future start-up.
"The steel plant will be stopped and made safe once all the hot metal has been processed. The two mills will continue operating until all the available stocks have been rolled into saleable products, whereafter these operations will also be safely stopped. The plant and equipment will, for the moment, be placed on care and maintenance and prepared for future start up," said Evraz in a statement.
South Africa's largest steel producer ArcelorMittal South Africa (AMSA) had also recently spoken out about the difficult conditions facing local steel producers. AMSA CEO Paul O'Flaherty recently confirmed that the industry was seeking greater protection from steel imports through the implementation of a 10% ad valorem duty on such imports. Further, the sector had also called for regulations stipulating that locally-produced steel be used in public infrastructure projects.
