The South African Iron and Steel Institute (Saisi) has welcomed government’s directive for the scrap metal supply chain to be supported.
Saisi believes it is of national importance that the viability of the ferrous scrap and steel sectors be maintained.
Both the steel industry and the economy have been impacted heavily by the Covid-19 pandemic, causing extreme distress in the manufacturing sector and among steel producers.
Trade and Industry Minister Ebrahim Patel in the first week of July asked the International Trade Administration Commission (Itac) to determine amendments to the Price Preference System guidelines to address the shortage of affordable, good-quality scrap metal as a supply to the primary steel producing industry.
The Steel and Engineering Industries Federation of Southern Africa has also welcomed the announcement that government is looking into measures to support the metals and engineering sector in this manner.
Saisi says government’s decision to investigate measures to support the primary steel-producing fraternity comes at a time when there is a general weakness in the steel industry, mirroring the weakness of the economy.
Secretary general Charles Dednam says he trusts that Itac’s investigation into the supply of and demand for scrap in the country will identify issues that need to be addressed to ensure a sustainable supply chain which, together with the forthcoming Steel Master Plan, will stimulate demand and support growth for the steel sector.
“The policy decision taken by government to introduce an export tax on scrap metal is widely supported by electric furnace steel producers.”
Saisi represents 64% of the steel manufacturing companies delivering 92% of the steel output in South Africa.