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South Africa

Business is slow but demand should improve shortly as many companies completed their financial years at the end of February and will start purchasing again.

The prime lending rate is still at 11.75% but a cut is anticipated in the next few months. Inflation dropped from 5.5% in November to 5.1% in December, the lowest level since August last year. And at the time of writing, the rand is trading at 18.70 to a weaker US dollar as against 19.10 only a few weeks ago. 

In other developments, the ABSA Purchasing Managers Index climbed to 51.7 in February from 43.6 in January but business activity remains subdued. Meanwhile, new vehicle sales in South Africa fell 0.9% year on year in February to 44,749 units whereas exports jumped 27.5%.

The export ban on copper scrap remains in place while brass scrap (Honey, Nomad) can still be shipped abroad on payment of a 10% duty to South African customs. Aluminium scrap can still be exported through the International Trade Administration Commission but most dealers are selling locally, except in the case of one or two grades that are not consumed domestically and therefore need to be exported.

Arcelor Mittal in South Africa has announced a six-month deferral of the closure of its long steel business after agreement on short-term measures was reached by all parties. 

Businesses in South Africa are continuing to be affected by daily load shedding, although this is now at a reduced level following maintenance work. State-owned enterprises such as electricity producer Eskom and ports, rail and pipelines custodian Transnet are still hugely in debt and placing strain on the economy as they do not have the funds for urgently-required infrastructure upgrades.

Looking ahead, a General Election will be taking place on May 29 and the outlook is not positive for the ruling ANC which will probably need a coalition with other parties.