Business is very slow as the country is still in Level 3 lockdown and the number of COVID-19 infections is expected to continue to rise sharply over the coming period.
Many industries are on short-time working. Companies are restructuring and have been cutting salaries as well as staff numbers in a bid to survive the virus and the accompanying recession. Metals recyclers are continuing to operate but there is not much scrap available and prices paid are very high.
Export permits were only being issued at the end of June owing to the lockdown and a delay in the decision by the International Trade Administration Commission (ITAC) on the way forward. The DTI/ITAC are exploring an export tax on scrap metal in order to stimulate local and downstream industry, and a decision is scheduled to be made within the next two months.
Businesses are also being affected by load shedding as a result of financial pressures on Eskom and insufficient maintenance.
The 2020 growth forecast for South Africa is now -7.2% and the tax shortfall is estimated at ZAR 200 billion. The unemployment rate is above 33% and could go even higher over the next few months owing to the impact of the virus and of recession.
At the time of writing, the rand is trading at 16.70 to the US dollar; the outlook is weaker although much will depend on what happens in the USA itself.
Non-Ferrous Metal Works (ZAF) (Pty) Ltd, Board Member of the BIR Non-Ferrous Metals Division