South Africa

Business is improving but there has still been none of the infrastructure spend required at electricity utility Eskom and rail company Transnet to stimulate the economy, although there has been a boost from the lack of load shedding over recent months. Inflation is currently at 3.6% but will hopefully decline over the next few months; the same applies to the prime interest rate which stands at 10.25%.

US tariffs of 30% are hurting the South African economy, affecting exports of agricultural products, motor vehicles/automotive parts and aluminium ingots; the South African government is still trying to arrange meetings with US representatives aimed at reducing the tariffs but the outlook is not promising. Meanwhile, there is also uncertainty surrounding the African Growth and Opportunity Act.

The ban on exports of copper scrap remains in place and dealers are continuing to ship out ingots, blocks and billets while awaiting clarification on the way forward from the International Trade Administration Commission (ITAC) and the Department of Trade, Industry and Competition, especially with the Price Preference System. Aluminium scrap can still be exported through ITAC but most dealers are selling locally, except in the case of those few grades which are not consumed domestically.

ArcelorMittal is still trying to negotiate a buyout deal with the Industrial Development Corporation. Meanwhile, Hulamin Extrusions remains up for sale and confirmation of any deal is still awaited.

The ABSA purchasing managers’ index soared to 48.7 in January from 40.5 in December. And at the time of writing, the rand has strengthened to a rate of around 16 to the US dollar.