Industry organisation the Recycling Association of South Africa (RASA) has called for the suspension of the Price Preference System (PPS), under which South Africa recyclers must first offer scrap at a 30% discount to local steel mills and pay the freight to a domestic mill before being permitted to export it.

In July, South Africa exported 113 000 t of primary steel products, of which 25 862 t was semi-finished steel products, including billets, blooms and slabs.

During the same month, it imported 192 000 t of primary carbon and alloy steel, excluding stainless steel and drawn wire.

The July imports figure is 36% higher than July 2025, and 83% higher than July 2024. Additionally, year to date, primary steel product imports are about 14% above the comparable period in 2025, says RASA.

“Producers in neighbouring countries send billets, rod and rebar into the South African market. The policy instrument designed to keep steel here is not keeping longs here. It is keeping scrap cheap while the longs arrive from elsewhere,” says RASA chairperson Geoff Borrajeiro.

“Some of the scrap is melted locally, with some of it leaving as billets at a low free on board value, under a lighter export regime than the scrap itself,” he points out.

South Africa imported 17 087 t of billets, 6 116 t of wire rod and 3 647 t of reinforcing bar in July, as well as 26 850 t of the long and semi-finished package, which is the product domestic mills say they need discounted scrap to produce.

Of this, Zimbabwe supplied 88%, with 14 930 t of billets, 5 082 t of wire rod and 3 501 t of rebar imported into South Africa.

“All of it crossed Beit Bridge by road. There were no flats in that consignment. It was furnace product,” Borrajeiro says.

South Africa exported 13 590 t of primary steel to Zimbabwe in July; mainly wire, sections, coil and plate. It imported 23 513 t of billets, rod and rebar from Zimbabwe. On primary steel, South Africa was a net importer from its northern neighbour by about 9 900 t in one month.

South Africa shipped 9 633 t of fabricated articles to Zimbabwe and brought back only 59 t. Fabrication still travels north. Primary longs and semis now travel south, he avers.

Scrap is trapped and discounted. Coated coil, plate and other products that fabricators actually need continue to arrive at Durban and Port Elizabeth. Longs, which the policy claims to defend, are rolling in through Beitbridge, he says.

South Africa’s steelmaking capacity remains above domestic demand. The Department of Trade, Industry and Competition's (dtic's) assessment in November 2025 recorded an annual transfer of R4.9-billion from recyclers, collectors and informal waste pickers to a small group of mills.

The assessment recommended that the PPS be set aside pending investigation of manipulation, but this recommendation has not been implemented, he points out.

“Formal scrap collection and exports have collapsed, from about 1.8-million tonnes in 2012 to roughly 150 000 t in recent years. Formal recycling employment has fallen from more than 15 000 t to about 9 600 t.

“An estimated 300 000 to 400 000 informal collectors recover most of the metal that enters the system, and do not appear in the Steel Roadmap, but are affected by the PPS,” says Borrajeiro.

If the purpose of the policy is local steel for local use, the trade account is the scoreboard. Primary imports are up. Billets are leaving for West Africa. Billets, rod and rebar are arriving from Zimbabwe. Collection is shrinking.

The mills have had cheap scrap for years, and the industrial outcome the policy was supposed to deliver has not arrived, he adds.

The proportionate next step is the concurrent suspension of the PPS and the scrap export duty, pending a time-bound, independent review that includes a competition-impact assessment, as well as a forensic investigation.

The dtic's own study points toward this, which is what the Competition Commission’s regulatory barrier process is now in a position to recommend, he says.

Targeted support for green steel, including for the flats that South Africa imports and the collection system that supplies furnaces, would be a more appropriate industrial strategy than a discount that travels from a waste picker’s trolley to a billet on a ship.

In July, South Africa sold semi-finished steel to West Africa, bought longs from Zimbabwe, and bought flats from Asia and Europe, while the policy states that scrap is too strategic to leave.

“That is not beneficiation,” says Borrajeiro.