Itac commissioner’s analysis of steel sector is incomplete

South Africa’s International Trade Administration Commission (Itac) chief commissioner Ayabonga Cawe suggested in a recent Bloomberg interview that South Africa’s steel industry can be rescued by growing demand through infrastructure spending, not by revisiting export controls or the price preference system (PPS).

He described the debate as “bubbling belligerence” and defended both the PPS and the 20% export tax as necessary regulation of a “strategic” recycled material.

With respect, Cawe’s analysis is incomplete and dangerously detached from the human reality on the ground.

Read/listen:

South Africa steel needs demand not belligerence, regulator says
Rules, not retaliation, guide SA’s trade policy – Itac

The PPS, introduced in 2013 as a temporary measure, forces independent scrap dealers – and the hundreds of thousands of informal waste pickers who underpin South Africa’s circular economy – to sell to domestic steel producers at a 30% discount below international benchmarks, plus the seller pays for delivery.

In practice, this has enabled ‘blocking offers’, uniform low pricing across regions, preferential arrangements with select sellers, and seller-funded transport costs.

Waste pickers who collect and sort ferrous scrap for minimal returns now see their already meagre earnings devalued even further as costs cascade down the supply chain.

Independent dealers and exporters are being foreclosed.

Recycling volumes that could support downstream manufacturing and genuine beneficiation are being suppressed.

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Cawe makes no mention of these people – the very men and women in townships and rural areas who depend on scrap for survival.

Independent investigation

He also does not acknowledge that the Department of Trade, Industry and Competition (dtic) itself publicly admitted in November 2025 that the PPS is being systematically manipulated and recommended it be set aside pending an independent investigation.

Read/listen:

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The system was never meant to be permanent. Yet here we are, 13 years later, still feeding fully grown steel producers with the same preferential pricing formula originally designed as a short-term subsidy for mini-mills.

Cawe suggests we simply ‘recalibrate the rents’ once we agree scrap is strategic.

But when the mechanism itself was modelled on cartel pricing practices, enables ongoing buyer-side foreclosure, and devastates the livelihoods of hundreds of thousands of informal collectors, the issue is not antagonism – it is the urgent need for fundamental reform and proper competition oversight.

Even more alarming, the PPS itself appears to have been developed off the blueprint of cartel conduct.

In its defence before the Competition Tribunal, Cape Gate described the system as the “standard pricing formula which was used to cartel the price of scrap from 1998 to 2008”, effectively calling it the “child of cartel conduct”.

This remarkable admission came in the very case in which the tribunal found buyer cartel conduct.

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Read:
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The Competition Commission’s (CompCom) dawn raids on 13 February 2026 at Scaw, Cape Gate, Force Steels and Unica, over suspected price-fixing of shredded and processed scrap, confirm that these risks are not historical – they are current.

During our 24 November 2025 meeting with Itac’s PPS technical team, officials openly advised they have no competition-law expertise, no red-flag mechanisms, and no systems to detect foreclosure or manipulation. Their only suggestion was that affected parties approach the CompCom.

This is a material failure to honour the 2015 Memorandum of Understanding (MoU) between Itac and the commission, which requires cooperation and joint assessments on trade measures with anti-competitive effects.

Cawe is correct that infrastructure-led demand matters.

But good industrial policy cannot come at the expense of fair competition, small business participation or the livelihoods of the informal sector.

When a policy intended to support local industry instead entrenches dominance, invites abuse and behaves like a virus that ultimately kills its own host – the circular economy – it undermines its own objectives.

The time for deflection is over.

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We call on the CompCom to act urgently: invoke the 2015 MoU, demand immediate safeguards, open a formal investigation into systemic manipulation, and support the dtic’s recommendation to suspend the PPS pending proper review.

Read:

Can South Africa survive without Amsa?

South Africa cannot afford a scrap-metal policy that protects dominant players while crippling the very collectors and recyclers who keep our economy circular.

The hundreds of thousands of informal waste pickers who wake up every day to collect what others discard deserve better than to be invisible in Itac’s narrative.

Listen to Duduzile Ramela’s interview with Itac’s Ayabonga Cawe in this SAfm Market Update with Moneyweb podcast (or read transcript here):

You can also listen to this podcast on iono.fm here.

Nancy Strachan is CEO of the Recycling Association of South Africa (Rasa). 

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