South Africa

Business is slow as most companies only returned to work on January 13 following the holiday period. The outlook for the country and for the economy is positive but much still depends on infrastructure spend, especially by public utility Eskom and by railway, ports and pipelines company Transnet. 

Load shedding has been suspended for over 300 days as maintenance continues to take place within Eskom. At the same time, the government is continuing to investigate a nuclear power plan to end the country’s energy issues.       

The ban on copper scrap exports remains in place; dealers are still exporting ingots, blocks and billets, although there is the possibility of a duty going forward. Confirmation is awaited by the end of March on the way forward with the International Trade Administration Commission (ITAC) on the current system, especially the price preference system. Aluminium scrap can still be exported through ITAC but most dealers are selling domestically, except for one or two grades that are not consumed locally and therefore have to be exported.

In other developments, the announced closure of ArcelorMittal South Africa’s long steel production at the Newcastle blast furnace could significantly impact the country’s automotive sector, which is a cornerstone of the domestic economy.

In economic news, the prime lending rate is at 11.25% and further reductions are anticipated in the first quarter of 2025. Inflation is at 3% with hopes of even lower levels over the next few months, while the rand exchange rate is down at 18.50 to a stronger US dollar.    

A concern for the economy is that the ABSA Purchasing Managers’ Index fell to 46.2 points in December from 48.1 points in November.