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South Africa

Business remains quiet and continues to be affected by higher interest rates, reduced demand and ongoing load shedding, the last of which is still being implemented for a minimum six hours a day. This entails a significant impact on the economy, and especially on manufacturing industries and distribution. Furthermore, public utility Eskom is continuing to struggle with maintenance and breakdowns at its power stations, but there are hopes this situation will improve in 2024.

The prime lending rate is expected to remain at 11.75% for the balance of 2023 but could be reduced in early 2024. PMI numbers have been worse than expected in dropping to 45.35 in October from 46.21 in September.

South Africa’s ban on exports of copper, brass, gunmetal and ferrous scrap remains in place and rules are looking to be changed regarding the handling and processing of copper scrap.

Aluminium scrap can still be exported through the International Trade Administration Commission but most scrap dealers are selling locally, apart from one or two grades which are not consumed domestically and therefore have to be exported. There are major issues at three South African ports with some 100,000 containers stuck outside. Delays of a few weeks or even months are reported in receiving containers, thus affecting the South African economy.

In what would deal another big blow to the economy, ArcelorMittal is looking to close some of its works in South Africa, potentially affecting 3500 jobs. The main reasons are Transnet rail freight inefficiencies and lack of government spending on infrastructure.  

At the time of writing, the local currency is trading at 18.65 to the US dollar.