Introduced on May 10, 2013, through a trade policy directive, the Price Preference System (PPS) has been subject to numerous reviews and amendments in recent years. The most recent, which is the subject of this piece, was gazetted on September 3.

This was the third for 2021, with the others having been gazetted on July 29 and May 21. There have been six reviews over the past few years, with the 2020 ones having been gazetted on December 24, November 20 and October 2.

The trade policy directive granted the International Trade Administration Commission of South Africa (Itac) powers to regulate the export of ferrous and nonferrous waste and scrap metal. As a consequence, Itac established a PPS pursuant to which it would not allow the export of scrap metal unless it had first been offered for sale to the domestic industry – for local beneficiation – for a period and at a price discount or other formula determined by Itac.

In the September 3 Government Gazette notice, Itac invited comments on the proposed amendments to the PPS policy guidelines (Export Control Guidelines on the Exportation of Ferrous and Non-Ferrous Waste and Scrap) gazetted on October 2, 2020, with the submission deadline being September 20.

Proposed is the insertion of a method for the price preference calculation for red metal and scrap, including copper, brass and bronze waste and scrap. The method for the price preference calculation for the different Institute of Scrap Recycling Industries (ISRI) grades to be applied by Itac as the formula is the calculation of the rand value and 10% PPS discount against the percentage of the red scrap metal content. The formula is the LME convert to rand x (percentage content – [less] 10%). As an example, the LME to rand × 86% (Barley 96% – 10% = 86%); and R100 000 × 86% = R86 000.

An additional method of calculation for an extensive list of aluminium scrap products proposes the insertion of a method for the price preference calculation for the different ISRI grades to be applied by Itac as the formula entails the calculation of the rand value and 25% PPS discount against the percentage of the aluminium scrap metal content. The formula is the LME convert to rand X (percentage content – [less] 25%). As an example, the LME to rand × 45% (Taint Tabor 70% – 25% = 45%); and R20 000 × 45% = R9 000.

Interested parties are urged to carefully study the proposed calculations and make their representations to Itac. To assist in the endeavour, it is important to consult and study the ‘Amended Export Control Guidelines on the Exportation of Ferrous and Non-Ferrous Waste and Scrap’ published in the Government Gazette on October 2, 2020.

The goods subject to the PPS, and their respective tariff subheadings, are: ferrous waste and scrap, remelting scrap ingots of iron or steel (7204); copper waste and scrap (7404.00); nickel waste and scrap (7503.00); aluminium waste and scrap 7602.00); lead waste and scrap (7802.00); zinc waste and scrap (7902.00); tin waste and scrap (8002.00); tungsten (wolfram) waste and scrap (8101.97); molybdenum waste and scrap (8102.97); tantalum waste and scrap (8103.30); magnesium waste and scrap (8104.20); cadmium waste and scrap (8107.30); antimony waste and scrap (8110.20); manganese waste and scrap 8111.00; and beryllium, chromium, germanium, vanadium, gallium, hafnium, indium, niobium (columbium) rhenium and thallium waste and scrap (81.12).

To learn more about the ISRI, which promotes safe, economically sustainable and environmentally responsible recycling through networking, advocacy and education, please visit the institute’s website: www.isri.org. For more information about the LME – a futures and forwards exchange with the world’s largest market in standardised forward contracts, futures contracts and options on base metals, which also offers contracts on ferrous metals and precious metals, visit www.lme.com.