However‚ the slow pace of infrastructure development continues to hamper domestic steel demand. The positive production trends in a number of manufacturing sub-sectors such as motor vehicles‚ electrical appliances and machinery were also a catalyst for steel demand as evidenced by a rise in the manufacturing purchasing index from the previous quarter.
The company expects a turnaround from the net loss realised in the first quarter to positive earnings in second quarter underpinned by stable market demand‚ recovery of production back to normal levels and higher sales volumes. International steel prices are expected to remain subdued. The movement in the rand/US dollar exchange rate has an important bearing on the group’s earnings.