The Department of Trade, Industry and Competition has proposed an updated Price Preference System (PPS) Policy for the export of ferrous and non-ferrous scrap metal. This follows the outright ban of the export of scrap metal on 3 July, for a period of 2 months, while ITAC investigated the efficacy of the current PPS. The proposed updated PPS follows that investigation.

The ban on scrap is due to end on 3 September, but it is not clear if the ban will actually be lifted from 4 September onwards, as the proposed PPS will not yet be in place.

To add to the complexity, the PPS will be replaced next year, by an export duty to be administered by National Treasury. Presumably, the new PPS, however that ends up looking, will be in place between when the ban ends and when the export duty is imposed, but it is by no means clear that the ban will not be extended while the new PPS policy is ironed out and implemented. While it would seem to be obvious that this process should be expedited to remove the uncertainty, there is a strong incentive for the domestic scrap consuming industry to have the ban maintained, which of course drives down the price of scrap.

It is not clear what the Minister will do, but if you are impacted by the trade in scrap, it is important that you submit your comments to the proposed amendment.

Interested parties have until 16 September 2020 to comment.

Want to know more? Email us on info@xa.co.za.

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