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The Steel and Engineering Industries Federation of Southern Africa (Seifsa) has welcomed government's announcement that it has tasked the International Trade Administration Commission (Itac) of South Africa to look into measures to support the metals and engineering (M&E) sector.
Seifsa says it appreciates that government has recognised the strain the M&E sector is under, owing to steep price hikes in both raw materials and main inputs, as a result of Covid-19, as well as existing sector issues.
The pandemic has resulted in a global shortage of affordable, good-quality scrap metal amid a downturn in global manufacturing, owing to lockdowns worldwide, it notes.
Seifsa CE Kaizer Nyatsumba says Trade and Industry Minister Ebrahim Patel’s directive to Itac is, therefore, very welcome.
Patel in the first week of July asked Itac to determine amendments to the Price Preference System guidelines to address the shortage.
“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,” notes Nyatsumba.
Seifsa represents 22 employer associations in the broad M&E sector and has historically supported an export tax on scrap metal, owing to challenges in the metal industry, including significant price increases for all main inputs in the sector, reduction of scrap volumes – as a result of increased cost of overheads in recycling – and opportunity cost associated with scrap metal theft.
“We also hope that the Steel Masterplan, which has been in development for some time now, will have the effect of simulating demand for the M&E sector.”