SA government clarifies pricing standard for aluminium scrap in new policy

The South African government has clarified how it calculates the price preference on aluminium scrap to the local market under a newly-implemented scrap export policy in an amendment notice, published in the Government Gazette, on November 15.

The notice stated that the calculation of the price preference will be based on the scrapindex.com price of cast aluminium scrap, also known as “tense”, as a starting point for calculating the discount price on specified aluminium grades for sale in the domestic market.

The aluminium grades that will use the price of cast aluminium are: clean mixed old alloy sheet; aluminium borings and turnings; aluminium extrusions; aluminium litho sheet scrap; clean painted aluminium scrap; coated aluminium scrap; scrap aluminium auto radiators; bare aluminium wire scrap; aluminium auto wheel scrap; aluminium foil scrap; and paper-backed aluminium foil waste and aluminium auto fragments.

The amendment follows some confusion over the pricing method used by the country’s regulator, the International Trade Administration Commission (Itac), since the new scrap policy was implemented on September 16.

Itac’s pricing system lacked transparency, according to scrap merchants, and it was difficult to determine whether the Itac prices, used as a starting point for the 20% discount, were fair.

The new policy requires scrap merchants to offer ferrous and non-ferrous scrap to the domestic market, at a 20% discount to index prices, before they are allowed to apply for export permits for the scrap.