This week, the Department of Trade, Industry and Competition presented its progress report on the Steel and Metal Fabrication Master Plan to the Portfolio Committee on Trade, Industry and Competition. The presentation was measured, professional but largely silent on one of the most consequential policy failures in the steel value chain. 

Seven months prior, during a steel industry meeting with Minister Parks Tau, the department presented both its internal research and the outcomes of their independently commissioned socio-economic impact assessment. This review specifically evaluated the effects of current policies, including the scrap metal export tax and the Price Preference System (PPS). The findings were clear and unambiguous. The research found that the 20% export tax combined with the Price Preference System (PPS) had suppressed domestic scrap prices by R1 000 to R1 500 per tonne below international levels. In 2023 alone this created a R4.9 billion transfer from recyclers, collectors and waste pickers to a small number of mini-mills. Formal scrap collection and exports collapsed from 1.8 million tonnes in 2012 to roughly 150 000 tonnes in 2023. The review found the PPS mechanism largely ineffective, that it had incentivised billet exports while harming upstream participants, and that recycler margins had been eroded to the point where collection itself was being discouraged. Its clearest recommendation was direct: suspend the PPS pending an independent investigation into system manipulation. 

That recommendation has never been implemented. Yesterday’s parliamentary presentation reduced the entire issue to two bullet points under “measures under consideration” a further assessment of the appropriate PPS discount level and export tax level. The stronger language from the department’s own commissioned review had disappeared. What remained were “additional measures proposed by industry” listed neutrally, without endorsement. When presenting challenges the department noted, almost in passing, that “Government Policies: Scrap metal policy favouring mini mills (according to large producers like AMSA)”. The upstream evidence – the R4.9 billion transfer, the regressive impact on approximately 400 000 informal collectors, the documented encouragement of regulatory arbitrage through billet exports – was simply not engaged.

This is not a minor drafting difference. It is a material shift in position between a stakeholder meeting in November 2025 and a parliamentary oversight hearing in June 2026. The independent evidence of harm has not been withdrawn or refuted. It has been set aside. 

South Africa does not have a structural scarcity of ferrous scrap as claimed. Independent data shows a cumulative “Available Scrap Well” exceeding 46 million tonnes by 2024, with annual availability often above 1–2 million tonnes after domestic use. The problem is not insufficient material; it is distorted collection incentives. When prices paid to suppliers are held artificially low, price-sensitive collectors – especially the informal sector – withdraw. That is the opposite of what South African industrial policy claims to want to achieve. 

The downstream consequences are now visible to everyone. Semi-finished steel (billets, blooms and slabs) imports surged six-fold in 2025 while local mini-mills exported almost 620 000 tonnes of semis – converting PPS-discounted scrap into exported semis and avoiding the full price-preference and duty regime that applies to raw scrap. Even the South African Iron and Steel Institute has recorded a 239% increase in semis exports since 2018. The policy intended to retain scrap for local beneficiation is instead facilitating its export in semi-finished form while competing billets flood the market. This is not beneficiation. It is regulatory arbitrage at the expense of the upstream sector. 

The June 2026 presentation correctly identifies multiple “Master Plan leakages” – CSDP abandonment by SOEs, procurement enforcement gaps, trade circumvention, unresolved energy costs and logistics failures. The scrap policy dilution fits the same pattern. When government commissions an independent review, receives clear findings and recommendations, and then presents Parliament with a diluted “under consideration” narrative seven months later, it undermines confidence in the entire policy process. 

The Recycling Association of South Africa and the Metal Recycling Association placed six practical recommendations before the Committee yesterday. They remain the minimum required to restore balance: 

1. Immediate suspension of the current PPS pending comprehensive independent review. 

2. A formal Competition Commission investigation or market inquiry into PPS administration and the emergence of billet conversion as regulatory arbitrage. 

3. A full status report on the lapsed Steel Master Plan and its governance. 

4. An explanation from the dtic why its own impact study recommendation on PPS suspension has not been implemented. 

5. A dedicated parliamentary oversight process for trade measures affecting the steel and recycling value chains. 

6. Future mechanisms that include transparent pricing, protection for small and medium recyclers, and safeguards against inter-provincial exclusion.