Industry organisation the Recycling Association of South Africa (RASA) has lodged a complaint with the Competition Commission about the alleged extended blocking of export permit applications in the ferrous scrap metal market by dominant buyers, as well as the alleged use of brokers to signal and coordinate significant price movements.
This conduct appears to have been designed to suppress prices at the collection gate through the manipulation of market conditions, RASA says.
It submitted additional evidence to the commission about the alleged “coordinated and anticompetitive” conduct in the ferrous scrap metal market.
RASA says that, for a period of two months, dominant buyers systematically blocked export permit applications, which effectively denied sellers access to the export market. Despite there being no physical shortage of scrap, the number of buyers in the domestic market was significantly reduced.
This created conditions of an artificial monopsony – a market in which dominant buyers dictate prices and terms – as the dominant domestic buyers had significantly greater power to dictate prices and terms, it says.
