There are conflicting views on what the enforced price discount on scrap metal has had on the industries in the metals value chain, though it is clear that more support is needed for the scrap metal processing industry.
First published in Daily Maverick 168.
Scrap metal is a critical feedstock into manufacturing. The metals value chain is central to South Africa's industrialisation and has significant linkages to infrastructure, construction, mining and a range of manufacturing industries.
The three largest consumers of metal products in South Africa are the construction industry, the mining industry and the transport equipment manufacturing industry, which together account for approximately R750-billion or 15% of SA's GDP, and employ nearly 2 million people (both formal and informal).
Public officials have implemented various measures to support the availability of affordable scrap metal to support the economy and add value to our raw material input base.
In 2013, the then minister of economic development issued a Trade Policy Directive for the International Trade Administration Commission (ITAC) of South Africa to regulate the exportation of scrap metal through the introduction of the Price Preference System (PPS).
The objective was to improve the availability of better-quality scrap metal at affordable prices...