Unlisted steel-maker Columbus Stainless has been fined R32.57 million for entering into a price-fixing agreement or engaging in a concerted practice with its competitors to directly or indirectly fix the purchase price of scrap metal, according to a report in Business Report.
Columbus agreed to the fine in terms of a settlement agreement it reached with the Competition Commission, which was confirmed by the Competition Tribunal.
It is the first settlement agreement in this matter to be heard by the tribunal.
The other respondents in the case are ArcelorMittal, Cape Gate, Scaw, Highveld Steel & Vanadium, Cape Town Iron & Steel Works and the SA Iron and Steel Institute.
The commission launched an investigation into the scrap metal market after receiving an application in December 2009 for leniency under its corporate leniency programme.
It referred the matter to the tribunal in August last year after finding that from about 1998 until at least 2008 the firms had entered into an agreement to directly or indirectly fix the price of scrap metal and acted as a buyer’s cartel.
Its investigation also found these firms had collaborated and acted in tandem with the upstream cartel of scrap merchants.
These merchants were subject to a separate investigation by the commission, which previously referred cases against these merchants to the tribunal.
The commission told the tribunal the firms began co-ordinating and aligning their behaviour through meetings and correspondence.
It said the firms and the scrap merchants collectively negotiated and agreed a standard pricing formula that was used to determine the purchase price of scrap metal and on annual adjustments to this formula.
They also used the agreed adjustments to collectively renegotiate the pricing formula with merchants.
The firms and merchants also agreed on premiums that were applied by different tiers of scrap merchants when selling scrap metal, which were then structured as discounts off the formula price.
The firms annually agreed the premiums to be applied by different tiers of scrap merchants and used their agreement as a basis for renegotiating the premiums with scrap merchants.
