Sourth Africa faces delay threat to projects over shortage of steel rebar

Sunday, 13 Feb 2011

It is reported that large building and construction projects in South Africa could grind to a halt within weeks because of a shortage of rebar. The shortage was caused by a breakdown last month of ArcelorMittal’s main furnace in Newcastle in KwaZulu Natal.

The South African Reinforced Concrete Engineers Association said that the breakdown meant there would not be any rebar available this month, possibly halting building and construction projects in SA, and resulting in delays and additional costs. This comes at a time when the construction industry is reeling from the effects of the global economic recession and the spending hangover after last year’s Soccer World Cup. While there was huge state investment in fixed capital last year, the government has been slow since then to issue new tenders and tardy in paying for work done. The private sector is complaining bitterly.

The association said that the shortage had been made worse by the closure last year of the unprofitable reinforcing steel rolling mill, Cape Town Iron & Steel Works, which had been a large supplier of the steel.

Mr Rod Mountford director of the association said in a statement that "Members of the association are reporting serious shortages of rebar and mesh rod, which has been totally unforeseen and beyond their control."

Mr Mountford said that "The imported product is more expensive than locally sourced reinforcement. Individual importers of rebar will also have to ensure that the quality of the steel complies with South African standards and specifications. Steel mills have already been notified there are price increases due this month and in March 2011."

SA's two remaining suppliers Scaw Metals and the Davsteel division of Cape Gate, were unable to provide construction firms with their required volumes, leaving a two to three month lead time for imported rebar. (sourced:businessday.co.za)