The Department of Trade, Industry and Competition has directed ITAC to review the Price Preference System (PPS) on scrap steel. Should the PPS be scrapped or reduced it will have significant consequences for both scrap dealers as well as manufacturers.

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

Automotive castings scrap courtesy of International Aluminium Institute

The minister further noted in the directive that the focus of ITAC’s investigation would only be on the PPS discount on ferrous scrap alone, preserving all other export control elements under the PPS the same.

The minister also instructed ITAC, in alignment with the Department of Trade, Industry, and Competition’s commitment to transparency and stakeholder engagement, to provide interested parties with an opportunity to “submit their comments and concerns”.

The minister also directed ITAC, subsequent to the conclusion of its investigation, to provide notice of any change in the level of discount and the reasons therefore. This would occur only after ITAC has made a recommendation to the minister in line with the results of its investigation, and the minister has made a decision on the matter.

In line with the minister’s directive, interested parties were invited to comment on whether the level of the discount for ferrous scrap metal, currently at 30%, should be amended. To support well-informed responses, evidence and perspectives on several key areas could be submitted. These include, but are not limited to, the alleged challenges faced by the integrated steel value chain and how the current discount level is impacting this sector of the economy, how the current level of the discount is impacting other sectors of the economy, including recyclers, foundries and mini-mills, how and whether the increase in the level of the discount for ferrous scrap metal from 20% to 30% has impacted the availability of ferrous scrap metal, what discount level would be more appropriate than the current 30% discount, and the rationale for a different discount level.

Interested parties were encouraged to provide data, case studies, or commercial experience to substantiate their views.

The cut-off deadline for interested parties to respond was the 22nd May 2025 so there is no time to submit any existing or new information. However, it is still important for all to be aware of the situation.

There was no date given as to when the Commission would make a recommendation to the Minister in line with the results of its investigation and when the Minister would make his decision.