The business outlook is challenging and demand has been weaker compared to the previous quarter. Ongoing load shedding for six to eight hours a day is damaging the economy, especially the manufacturing industries. Furthermore, Eskom is still struggling with maintenance and breakdowns at its power stations. Load shedding is set to continue for the next 12 to 18 months.
Inflation was at 7.6% at the end of August and the Central Bank is continuing to increase interest rates, most recently by 75 basis points. Further increases are anticipated.
Following the introduction of an export tax on scrap metal (10% on both copper and brass and 15% on aluminium), the Department of Trade & Industry and the Treasury are now talking of a potential ban on scrap exports, although nothing has been finalized as yet by the authorities. There are ongoing export applications on a weekly basis, especially for heavy brass scrap (Honey) and aluminium scrap.
The rand is trading weaker at 18.10 to the dollar owing to the strength of the US currency.