The International Trade Administration Commission of South Africa (ITAC) has announced that a revised Guidelines for the Price Preference System (PPS) have been drafted. However, ITAC has gazetted only modest changes to the contentious PPS for scrap metal, reducing the discount for domestic ferrous scrap consuming industries from 30% to 25%.

The PPS follows from a trade policy directive issued on 10 May 2013 by the then Minister of Economic Development directing ITAC to exercise its powers under the International Trade Administration Act, 2002 (Act No. 71 of 2002) to regulate the exportation of ferrous and non-ferrous waste and scrap metal.

The guidelines set out the framework for the implementation and administration of the PPS in relation to the exportation of ferrous and non-ferrous waste and scrap metal. Interested parties were invited to submit comments on the revised Guidelines.

Review
In April 2025 the Department of Trade, Industry and Competition directed ITAC to review the Price Preference System (PPS) on scrap steel.

Minister Tau issued a policy directive to ITAC instructing them to review the Price Preference System (PPS) on scrap steel. ITAC had to investigate the merits or otherwise of modifying the scrap metal, ferrous and non-ferrous waste. This was according to a notice gazetted by the Department of Trade, Industry & Competition, which – in addition to issuing the necessary directive – summarised its underpinning rationale.

The Trade Policy Directive was issued in terms of Section 5 of the Act, 2002, in the Government Gazette of 14 April 2025. In the directive, the minister noted the challenges being alleged by the integrated steel value chain and directed ITAC to exercise its authority under the Act to investigate as a matter of urgency whether, in light of the alleged challenges being faced by the integrated steel value chain, and any other relevant considerations, the current level of the PPS discount on ferrous scrap at 30%, requires modification.

Following a review, ITAC gazetted amended PPS guidelines on October 31, 2025, that also confirmed changes to the administrative aspects of the scheme, including the establishment of a Technical Working Group (TWG) to assist it with the administration of the PPS.

Membership of the TWG would include a representative from the Metal Recyclers Association, the South African Iron and Steel Association, the Copper Development Association Africa, the Nonferrous Metal Association, the International Zinc Association of Southern Africa, and the Recyclers Association of South Africa, and would be convened at the request of ITAC.

The new discount on ferrous scrap was decided on the basis of developments in the market that had affected international demand, as well as economic modelling conducted by ITAC. No changes were made to the non-ferrous scrap discount.

Should the PPS be scrapped or reduced it will have significant consequences for both scrap dealers as well as manufacturers.