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South Africa

The business outlook is reasonable and demand for non-ferrous scrap is stable.

KwaZulu-Natal province suffered terrible flooding in mid-April and this has affected infrastructure and therefore delayed its economic recovery. Many businesses will take three or four months to recover, whereas Toyota could take six to nine months to resume production at its Prospecton plant.   

Ongoing load shedding and strikes are hurting the economy. Furthermore, public utility Eskom is still struggling with maintenance and breakdowns at its power stations  

With oil at US$ 100 per barrel, the price of diesel has been increased by ZAR 0.98 per litre in May and petrol will probably head upwards in June owing to a weaker currency and a firmer oil price.   

As mentioned previously, an export tax on scrap metal (10% on both copper and brass and 15% on aluminium) has been introduced by the Department of Trade & Industry, the Treasury and the International Trade Administration Commission. There is now talk from the DTI and Treasury of banning exports of scrap metal owing to thefts at Eskom and Transnet which are affecting the economy and its growth.    

Meanwhile, Honey continues to be the main category of scrap metal still being exported from South Africa. Scrap dealers are still melting copper, brass and aluminium into blocks, ingots and billets; there is the possibility of an export tax on the various products going forward.     

At the time of writing, the rand is trading weaker at 15.95 to the US dollar.