The intentions and rationale behind the proposed introduction of an export tax on scrap metal may be contradictory to the greater wellbeing of the scrap metal sector.
That’s according to one of the biggest players in the sector, Macsteel, which is of the view that markets should not be regulated in favour of any one constituent party or sector over another.
The export tax was first mooted in 2013, but it gained renewed momentum with an announcement by Finance Minister Tito Mboweni in his 2019 budget speech in February that National Treasury would work with the Department of Trade and Industry and the Department of Economic Development to explore its introduction.
However, according to Mike Benfield, Macsteel’s CEO, 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. 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.”