Business is still slow and many companies are looking to reduce their labour force in order to cut costs as there is not much demand locally.
The proposal from the government and the International Trade Administration Commission (ITAC) to impose a tax or duty on scrap metal has been delayed. Aluminium and steel scrap are still being exported and the ITAC is continuing to visit works to verify the quality and quantity applied for on their export applications. It has been suggested that some exports have been 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, but margins are being squeezed.
The Judicial Commission of Inquiry into Allegations of State Capture is continuing to look into corruption and bribery across all industries in South Africa, especially state-owned enterprises. It is anticipated that punishments will be handed down shortly to some of the guilty parties.
The outlook for public utility ESKOM is still not good as additional funding is required from the government. There has been no load shedding this winter.
In other developments, a weaker dollar has led to the South African rand strengthening to 13.90 against the US currency. The price of petrol will fall in August owing to the stronger currency and a weaker oil price. Meanwhile, sales of motor vehicles are continuing to drop in comparison to last year; the domestic outlook is unexciting but export prospects are a little brighter.
Non-Ferrous Metal Works (ZAF) (Pty) Ltd, Board Member of the BIR Non-Ferrous Metals Division