Scrap metal sector calls for broader changes as price-fixing probe highlights fault lines

SEATTLE (Scrap Monster): The metals recycling sector has reiterated its call for a full, independent inquiry into the policy framework governing scrap metal, including the Price Preference System (PPS) and export-related measures. It argues that government-linked policies—particularly the PPS—have created structural distortions that may have enabled or entrenched anti-competitive conduct.

In the wake of the Competition Commission's raid on the premises of Scaw South Africa (Scaw), Cape Gate, Shaurya Steel trading as Force Steels, and Unica Iron and Steel (Unica) as part of an ongoing price-fixing investigation, the Metals Recyclers Association (MRA) said it welcomed the Commission's investigation, while also urging structural reforms.

“The sector remains under considerable strain due to policy uncertainty, depressed domestic pricing benchmarks, and regulatory instability. While we support robust enforcement against any proven anti-competitive conduct, we maintain that structural reform of the scrap metal policy framework is essential to restore investor confidence, protect jobs, and support South Africa’s broader industrial and circular economy objectives,” MRA Chairman Quintin Starkey said.

The MRA said it believes that any credible investigation into alleged anti-competitive conduct is in the public interest and necessary to restore fairness and transparency in the scrap metal value chain.

“Our call has been for a transparent, multi-stakeholder inquiry into how these policies were introduced, how they are administered, and whether they have facilitated exclusionary or cartel-like outcomes. As such, our engagement has been policy-focused and systemic in nature, rather than confined to a specific complaint. We continue to encourage whistleblowers and industry participants to come forward with information to support lawful and fair market practices,” it said.

The MRA, in collaboration with the Recycling Association of South Africa (RASA) and the Scrap Recycling Coalition (SRC), has, since the Competition Tribunal’s confirmation of a decades-long buyers’ cartel, formally demanded a comprehensive inquiry into scrap metal policies, including the PPS and export duties.

Starkey said the industry representatives have urged the Presidency, the Department of Trade, Industry and Competition (DTIC), the Competition Commission, and the International Trade Administration Commission (ITAC) to conduct a transparent review with public participation and binding recommendations.

The three recycling bodies strongly rejected the amendments gazetted by ITAC, describing them as insufficient and failing to address the fundamental structural flaws in the system.

“Our position is that minor adjustments to discount levels do not correct the underlying distortions, including:

The use of an inappropriate policy baseline;

The continued ‘seller pays transport’ requirement, which risks reinforcing market segmentation; and

The broader economic distortions affecting recyclers, informal collectors, and downstream manufacturers.”

“We have actively opposed recent amendments to the PPS. We have also highlighted the significant employment and circular economy implications of these policies, noting that the recycling sector supports hundreds of thousands of informal collectors and contributes materially to GDP,” Starkey said.

Courtesy: www.iol.co.za