The economic and business outlook is positive but with a few headwinds, especially surrounding electricity and the potential for load-shedding as insufficient maintenance has been conducted at power facilities. There is a possibility that electricity costs will jump 20.5% in April, a hike that would impact the economy and inflation which currently stands at 5.5% and will increase in the short term.
The International Monetary Fund’s growth forecast for South Africa this year has been cut to 1.9% owing to lower growth elsewhere, especially in China.
Following the introduction of an export tax on scrap metal (10% on both copper and brass and 15% on aluminium) by the Department of Trade & Industry, the Treasury and the International Trade Administration Commission (ITAC), there is still an issue with the Price Preference System as well as with the export tax, and so the Metal Recyclers Association of South Africa has taken ITAC to court over the latest regulations.
The main scrap category being exported is Honey. Scrap dealers are continuing to melt copper, brass and aluminium into blocks, ingots and billets.
At the time of writing, the rand is trading at around 15.20 to the US dollar.