Steelmaker ArcelorMittal South Africa (AMSA) has called for the immediate suspension and review of recently amended regulations governing the price preference system (PPS) for scrap metal, warning that the policy continues to damage the country’s wider steel industry and undermine industrial competitiveness.

In a statement issued on November 5, the company said South Africa’s integrated steel value chain noted “with serious concern” the newly gazetted PPS amendments by the International Trade Administration Commission of South Africa (Itac).

While the changes were presented as supporting industrial development, AMSA said the policy “continues a decade-long approach that has weakened the country’s steel sector, undermined recycling livelihoods, and constrained industrial competitiveness”.

According to AMSA, the revised PPS again favours a small number of scrap-based mini-mills at the expense of the broader steel manufacturing ecosystem, including primary producers, downstream fabricators, recyclers, waste-pickers and industrial consumers.

“South Africa cannot afford policy choices that favour a narrow subset of beneficiaries while placing the wider sector and industry at risk,” the company said.

Citing independent economic research, AMSA said the PPS and related export restrictions had long suppressed local scrap prices below global parity, discouraging investment and employment in the formal recycling sector. The company said these measures also eroded the economic base of integrated steelmaking, reduced industrial competitiveness and failed to create substantial jobs.

“The consequences have been clear: shrinking output, job losses, reduced export capability and rising vulnerability in critical supply chains. These outcomes conflict with the government’s own stated objectives of reindustrialisation, localisation and green industrial growth,” the company said.

AMSA added that evidence-based recommendations submitted to Itac by the industry did not appear to have been reflected in the final decision. It noted that an independent scrap-industry study commissioned by the Department of Trade, Industry and Competition (dtic) had still not been released, despite being completed months ago.

“While government has acknowledged that the concurrent application of PPS and a scrap export tax was unintended and arose from administrative error, this error remains uncorrected,” the company added.

AMSA said a competitive steel sector was vital to support South Africa’s infrastructure programme, energy transition, export manufacturing and regional development under the African Continental Free Trade Area (AfCFTA). It warned that these national goals could not be achieved “by artificially transferring value from recyclers, waste-pickers, and primary and downstream manufacturers to a limited number of mini-mills”.

“It is in the national interest to immediately suspend and review the amended PPS; release the dtic scrap-sector report so it can be compared with the independent econometric report provided to Itac and the dtic; then correct the error of having both the PPS and an export tax; and for a transparent, evidence-based policy process to be followed focusing on the full industrial value chain,” the company said.

AMSA concludes that South Africa requires “a balanced scrap and steel policy that supports jobs, competitiveness, and long-term industrial capacity, not narrow interests”.