Macsteel, one of Africa’s leading manufacturers, merchandisers and distributors of steel and value-added steel products, believes the intentions and rationale behind the proposed introduction of an export tax on scrap metal may be contradictory to the greater well-being of the scrap-metal sector.
According to Mike Benfield, Macsteel’s chief executive officer, market forces should be left to themselves to create equilibriums in supply and demand.
“There are too many unintended consequences created as a result of regulation, making support for any regulation impossible,” he says. “It’s clear that efficient and cost-effective producers and supply chain participants need to emerge through a natural selection process, rather than one which is forced or regulated.
“We believe that the scrap price will drop further should an additional duty or tax be imposed on the export of scrap, as the export price (including any additional duty/tax) will need to be matched to the international price,” Benfield says. “This will force scrap producers to sell locally at better pricing than they would be able to achieve on the international market.”