The Recycling Association of South Africa (RASA) has welcomed the Competition Commission’s proactive and decisive intervention in the scrap metal sector.

RASA points out that, on February 13, the commission conducted search-and-seizure operations at the premises of several major scrap metal buying companies as part of its ongoing investigation into alleged coordinated price-fixing of shredded and processed scrap metal.

This action follows a third-party complaint lodged in 2023 and a further complaint initiated by the Competition Commissioner in February.

RASA says it commends the commission for its swift enforcement in this priority industrial intermediary sector.

The association posits that dismantling any alleged buyer-side cartel will help eliminate artificial barriers to entry, foster fair competition and create opportunities for small businesses, informal collectors, waste pickers and firms owned by historically disadvantaged persons to participate meaningfully in the market.

“However, we must condemn, in the strongest possible terms, the alleged conduct of these powerful scrap buyers. This is not mere commercial rivalry – it is outrageous, predatory collusion that has deliberately and systematically suppressed domestic scrap prices for years.

“It is the economic equivalent of a cartel secretly fixing the price of bread: except that instead of robbing ordinary South Africans of their daily staple, these buyers have been robbing hundreds of thousands of the poorest of the poor – informal metal recyclers and waste pickers – of their only source of income and survival.

“These are not abstract statistics. These are mothers, fathers and young people who walk the streets and scour landfills every day to feed their families,” the association says.

“The alleged price-fixing has crushed their earnings, deepened poverty, forced business closures, and driven many into desperation. The harm is real, severe and unforgivable.”

RASA says these raids provide compelling evidence that the market distortions highlighted in its letter to Trade, Industry and Competition Minister Parks Tau, dated November 20, remain a serious and ongoing concern.

The association explains that the letter urged the immediate suspension of the price preference system (PPS), an independent forensic investigation into its "manipulation since inception", and the removal of the export tax to restore equilibrium.

RASA says the Department of Trade, Industry and Competition’s (dtic’s) earlier recommendation to suspend the PPS pending review, combined with this latest enforcement step, demonstrates government’s commitment to evidence-based reform and cross-institutional cooperation.

While enforcement against anticompetitive conduct is crucial, RASA says sustained harm to recyclers, exporters, and the broader value chain – including suppressed domestic prices, business sustainability risks, and devastating job losses among the most vulnerable – persists under the current policy framework.

The association says the raids reinforce that complementary policy adjustments are urgently needed to level the playing field across the entire scrap metal ecosystem.

RASA has, therefore, renewed its call to the Minister, the dtic and the International Trade Administration Commission of South Africa (Itac) to immediately suspend the operation of the PPS for ferrous and nonferrous waste and scrap metal; to institute an independent forensic investigation into the operation and system manipulation of the PPS since its inception; and to remove the export tax to restore market balance and supply-chain functionality.

“The metal recycling sector – which supports more employment than downstream processing alone – stands ready to collaborate constructively with the Competition Commission, dtic and Itac to build a transparent, competitive and sustainable market,” says RASA.