South African recyclers condemn scrap export controls

South Africa – South Africa’s Metal Recycling Association (MRA) fears a heavy impact on business and employment now the country’s government has confirmed its intention to control exports of ferrous and non-ferrous scrap in an attempt to protect domestic metals industries. Earlier, the MRA had said it would take legal action against the government if such a move were made.

From September 16 this year, it will not be possible to export scrap unless it has first been offered to domestic consumers at a discount determined by the International Trade Administration Commission of South Africa (ITAC).

ITAC pricing policy currently determines that scrap metal should be offered to domestic users at a 20% discount to international spot prices. ITAC will calculate the discounted prices for different scrap grades at the end of each month and publish them on its website.

Under the new price preference regime, the regulator also wants to ensure that the quality of the scrap intended for export is accurately reflected on applications for export permits. All such applications will have to be accompanied by a letter or certificate signed by a metallurgical engineer to confirm the grades, type and quantity of scrap available for export.

In mid-June media reports, MRA’s spokesman Mike Wilson said that the association would take legal action against the South African government as soon as the export directive came into effect. According to Wilson, the measure will ‘affect the bottom line of absolutely everyone in the scrap industry, which will in turn affect employment’.

The cost of transporting scrap from different parts of the country to the port and from there to an overseas customer already increased the price of scrap substantially, he explained. Therefore, he added, domestic buyers already purchase the scrap at discounted prices.