South Africa

The recycled steel market has recently seen a shift into open policy confrontation. The Recycling Association of South Africa (RASA) and the Metal Recyclers Association (MRA) made a formal parliamentary submission on June 10 to the Portfolio Committee on Trade, Industry and Competition, placing on record that: the Steel and Metal Fabrication Master Plan has lapsed; the price preference system (PPS) constitutes a de facto export ban; and the government’s own impact study - recommending PPS suspension - has been ignored.

The RASA/MRA submission drew on International Trade Administration Commission adjudication minutes (PPS lists 1-95) to document consistent patterns of buyer dominance, including: prolonged pending periods; declines on “unreasonable engagement” grounds; blocking offers from buyers with outstanding debt; and inter-provincial transport cost manipulation that forecloses access for smaller sellers.

The submission confirmed that the Department of Trade, Industry and Competition’s own commissioned socio-economic impact assessment found the PPS combined with the 20% export tax had suppressed domestic recycled steel prices by some Rand 1000-1500 per tonne below international levels, generating a Rand 4.9 billion transfer in 2023 alone from recyclers and collectors to a small number of mini-mills. That review explicitly recommended PPS suspension pending investigation.

The June parliamentary presentation diluted this to two bullet points under “measures under consideration”. The cumulative 13-year transfer has been estimated at over Rand 78 billion, with formal collection volumes collapsing from 1.8 million tonnes in 2012 to roughly 150 000 tonnes in 2023, according to Engineering News.

Billet arbitrage by mini-mills has emerged as a systemic consequence of the distorted framework. Mini-mills exported approximately 400,000 tonnes of steel billets in 2025, converting PPS-discounted recycled steel into exported semi-finished steel and bypassing the price preference and export duty regime that applies to raw recycled steel. At the same time, semi-finished steel imports surged sixfold to nearly 196,000 tonnes, with Zimbabwe’s Manhize plant a significant source. The South African Iron and Steel Institute has recorded a 239% increase in semis exports since 2018. In one reported period, the arbitrage value exceeded Rand 780 million. In effect, a policy designed to retain recycled steel for local beneficiation is instead facilitating its export in semi-finished form while competing billets flood back into the market.

The RASA/MRA submission confirmed that no functioning Steel and Metal Fabrication Master Plan currently exists. The original signatories have expired, no new signatories have been appointed, and no current governance structure or implementation committee is in place. Despite this, the Department of Trade, Industry and Competition continued presenting “implementation progress” to Parliament. Multiple Master Plan leakages are operating in parallel: Competitive Supplier Development Programme abandonment by state-owned enterprises; procurement enforcement gaps; trade circumvention; and unresolved logistics and energy costs. The recycled steel policy deterioration follows the same pattern.

According to Newcastillian News, meanwhile, the ArcelorMittal South Africa (AMSA)/Industrial Development Corporation transaction has been pushed back further, leaving domestic steel capacity unresolved. AMSA’s financial position remains under pressure following a Rand 3.355 billion loss in 2025, with crude steel production and sales both down 12% year on year. AMSA’s ownership structure has direct implications for domestic recycled steel demand, long-product capacity and buyer concentration within the PPS regime. Until resolved, the domestic steel capacity outlook remains opaque.

In the period under review, the rand traded at around 16.20-16.50 to the US dollar, settling near 16.46 by late June. Global HMS prices remained sideways-to-weak, with Turkish buying interest subdued. The rand’s range kept export-equivalent HMS values in rand terms below levels that would incentivise informal collection, compounding the supply suppression already driven by PPS-administered pricing. The currency provided no meaningful export alternative to the PPS domestic price schedule.

The PPS dispute has moved from industry lobbying to parliamentary record. Whether that produces a suspension, an independent review or continued inaction is the single largest variable for the market going into the third quarter. Billet arbitrage, a lapsed Master Plan and an unresolved AMSA transaction are the compounding risks. HMS pricing and foreign exchange remain secondary until the policy question is answered.