South Africa’s scrap metal price system faces collusion probe call from recycling associations

SOUTH AFRICA – South Africa’s recycling associations have called on the Competition Commission to investigate the Price Preference System for scrap metal exports, citing “blocking offers”, uniform low pricing, and predatory practices that burden waste pickers and independent recyclers.

The joint press release from the Recycling Association of South Africa, Metal Recyclers Association, and Scrap Recycling Coalition highlights that domestic buyers, often dominant steel producers—receive scrap at a significant discount before any export is permitted.

Geoff Borrajeiro, RASA chairperson, explained that the PPS was introduced to promote domestic beneficiation and employment, but evidence shows it protects only 5 percent of the steel value chain while overlooking the other 95 percent.

A System Built on a Cartel Blueprint?

Borrajeiro noted that the Competition Commission has repeatedly warned, since 2014, about the high risk of collusion inherent in the PPS mechanism.

He added that the Department of Trade, Industry and Competition itself publicly acknowledged systematic manipulation of the PPS and recommended it should be set aside pending an independent investigation.

Despite these red flags, Itac continues to administer the PPS without meaningful competition law oversight.

In practice, the system has enabled “blocking offers”, non-genuine bids, uniform low pricing across regions, preferential sale agreements to select sellers, and seller-funded transport costs that distort the market.

Borrajeiro described the consequences as severe, noting that this predatory practice disproportionately burdens waste pickers, who collect and sort ferrous scrap for minimal returns.

Dawn Raids and Mounting Evidence

The February 2026 dawn raids by the Competition Commission on major scrap buyers for alleged price-fixing underscore that buyer-side anti-competitive risks are not theoretical.

Borrajeiro argued that what makes the situation even more alarming is that the PPS itself appears to have been developed off the blueprint of cartel conduct.

The 2015 memorandum of understanding between Itac and the Competition Commission requires cooperation on trade measures that could have anti-competitive effects.

Borrajeiro noted that Itac’s lack of safeguards represents a material failure to honour that agreement.

The Call to Action

The associations call on the Competition Commission to open a formal investigation into systemic manipulation and to support suspension of the PPS pending an independent investigation.

Borrajeiro argued that releasing long-awaited independent studies on the PPS’s socioeconomic impact would be a constructive first step.

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