The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the Government’s decision to look into measures to support the metals and engineering sector, which has been under significant strain due to increased global demand and steep price hikes in both raw materials and main inputs as a result of the Covid-19 pandemic.

The pandemic has resulted in a global shortage of affordable, good-quality scrap metal amid a downturn in global manufacturing due to worldwide lockdowns to curb the spread of the virus.

SEIFSA Chief Executive Officer Kaizer Nyatsumba said Trade and Industry Minister Ebrahim Patel’s directive to the International Trade Administration Commission of South Africa to determine amendments to the Price Preference System guidelines to address the shortage was to be welcomed. He said the interventions come at a time when the industry needs all the Government support it can get to survive the Covid-19 pandemic and the resulting economic turmoil.

“As SEIFSA, we have previously stated our support for the principle of the non-export of scrap metal and are heartened by the Government’s decision to support the industry during this difficult time of the pandemic, even as we await a longer-term solution to protect the industry through possible taxes on scrap metal exports,” Mr Nyatsumba said.

SEIFSA, which represents 22 employer associations in the broad metals and engineering sector, has in the past supported an export tax on scrap metal due to challenges in the metal industry, including significant price increases for all main inputs in the sector, reduction of volumes of scrap as a result of the increased cost of overheads in the recycling sector, the opportunity cost associated with scrap metal theft, as well as companies closures.

“We welcome Minister Patel’s intervention in this regard and hope that ITAC will move swiftly to protect local consumers of scrap metal. We hope that the Steel Master Plan, which has been in development for some time now, will also have the effect of stimulating demand for the metals and engineering sector,” Mr Nyatsumba said.