Cape steel manufacturer faces penalties for price-fixing in SA scrap metal market

BUYERS CARTEL

- CHEVON BOOYSEN

THE Competition Tribunal has found that steel producers Cape Gate (Pty) Ltd (Cape Gate) contravened a section of the Competition Act by participating in price-fixing in the market for the purchase of scrap metal in South Africa.

Cape Gate and three other scrap metal buyers - ArcelorMittal, Columbus Stainless, and Scaw South Africa - were found to have operated as a cartel when buying scrap metal from merchants.

Scrap metal, which includes waste metal from cans, household appliances, and other metal items, is a key input in the production of steel products.

The tribunal said: “The Tribunal has found that certain large buyers of scrap, including Cape Gate, entered into an agreement to fix the purchase price of scrap metal.

“ArcelorMittal and Columbus both admitted liability and concluded settlement agreements with the Competition Commission, which were later confirmed by the Tribunal. Scaw was the corporate leniency applicant.”