Business is still slow as a result of not much local demand and the Easter holidays, with a further two holidays to take place in May.
As regards the proposal from the government/International Trade Administration Commission (ITAC) that a tax or duty on scrap metal will be imposed this year, confirmation of the date of implementation is still awaited. Aluminium and steel scrap are still being exported and ITAC is continuing to visit works to verify the quality and quantity applied for on export applications. There have been some reports of exports being stopped as local consumers are buying material.
There continues to be an increase in export applications for Drink and Nomad which is affecting the brass scrap market and local consumers. Meanwhile, scrap dealers are still having their copper scrap converted into ingots/blocks and exporting the product. There is the possibility that, with the new regulations, export permits will be required going forward.
As for the ongoing Judicial Commission of Inquiry into Allegations of State Capture, some success is anticipated shortly in punishing the guilty parties. Corruption and bribery are to be found throughout the country and in all industries, especially among some of state-owned enterprises.
The outlook for public utility ESKOM is still not good but load shedding has been stopped for the short term and hopefully for the winter months.
The South African rand has weakened to 14.45 against the US dollar but remains very volatile. Meanwhile, there is a General Election on May 8 and the ANC is hoping for a majority of over 60% so President Ramaphosa can implement his strategy for the way forward and for achieving economic growth.
In other developments, sales of motor vehicles have continued to decline (dropping 8.7% in the first three months of 2019 when compared to the same period in 2018) and the outlook is unexciting. The price of petrol will increase by ZAR 0.58 per litre from the beginning of May, which will increase inflation and hurt local consumers.
Non-Ferrous Metal Works (ZAF) (Pty) Ltd, Board Member of the BIR Non-Ferrous Metals Division