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South Africa amends pricing system of scraps

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·        The South African authorities have amended the pricing system of scrap metal following complaints from the steel and other metal-producing sectors

·        The metal industries felt that the system was harming their business and constraining their recovery from the effects of the Covid-19 pandemic

·        The key changes to the price preference system (PPS) include the imposition of an additional discount of 10% when domestic buyers are located in inland provinces and scrap metal is located at the coast, to take care of transport costs

The South African authorities have amended the pricing system of scrap metal following complaints from the steel and other metal-producing sectors.  The metal industries felt that the system was harming their business and constraining their recovery from the effects of the Covid-19 pandemic. The key changes to the price preference system (PPS) include the imposition of an additional discount of 10% when domestic buyers are located in inland provinces and scrap metal is located at the coast, to take care of transport costs.

Domestic buyers will also have the right to weigh and inspect the material to “ascertain that material delivered is the same quality, type and weight as agreed to when the offer was made and concluded. The domestic buyers will have the right to claim reasonable compensation for costs incurred.  These changes were  made by the International Trade Administration Commission of South Africa (ITAC). It   took effect on October 2.

The pricing system was introduced in 2013 to promote the affordable supply of scrap metal to South African buyers.  The scrap dealers are required  to first offer scrap domestically at a prescribed discount to international prices, before it could be exported. The introduction of an export tax was under consideration, according to ministry sources. . Industry (scrap metal)  contributes R15 billion (US$906 million) to South Africa’s  GDP and employs about 350 000 people.

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