Category: Metal Industry

Scrap Under Scrutiny: SACC Raids Scrap Metal Firms over Alleged Price-Fixing

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By Tyla Lee Coertzen and Courtney Kaplan

On 13 February 2026, the South African Competition Commission (“SACC”) released a Media Statement (the “Statement”) indicating that it had carried out several search and seizure operations at four scrap metal purchasing companies in Germiston, Nigel, Vanderbijlpark, and Hammanskraal.

The SACC initiated the dawn raid investigations upon grounds of reasonable suspicion that the four companies – namely, Scaw South Africa (Pty) Ltd (“Scaw”), Cape Gate (Pty) Ltd (“Cape Gate”), Shaurya Steel (Pty) Ltd t/a Force Steels (“Force Steels”), and Unica Iron and Steel (Pty) Ltd (“Unica”) – were involved in fixing purchasing prices of shredded or processed scrap metal, used in the manufacturing of steel products, which may amount to a contravention of section 4(1)(b)(i) of the Competition Act 89 of 1998 (the “Act”).

Section 4(1)(b)(i) of the Act prohibits agreements made between competitors, or concerted practices by competitors, including directly or indirectly fixing purchase prices or trading conditions. Firms who are found to be in contravention of section 4(1)(b)(i) may be liable to pay penalties of up to 10% of their annual turnover.

In terms of the Statement, the companies are suspected of having announced their price adjustments of the same prices, to be executed around the same time. The SACC alleges that this conduct amounts to a contravention of section 4(1)(b)(i) of the Act, which prohibits hardcore cartel conduct. The SACC’s investigation is said to have been brought about by a complaint submitted by a third-party in 2023, as well as a complaint initiated by the SACC in February 2026.

Section 48 of the Act empowers the SACC to conduct search and seizure operations and collect documents which concern an ongoing investigation. In respect of the scrap metal dawn raids that took place on 13 February, SACC provided that it received a search warrant from the North Gauteng (Pretoria) High Court authorising it to carry out these operations. The SACC further indicated that documents and electronic data will be seized and analysed with other relevant information to establish whether the companies are engaged in conduct which contravenes the Act.

Search and seizure operations are also known as “dawn raids” and are often initiated at the start of an investigation, usually before the respondents are aware they are under investigation, to enable the SACC to obtain the information before it might be destroyed. These inspections often come as a surprise to parties and are done in an effort to obtain evidence of potential infringements of the Act. The SACC, often accompanied by the South African Police Service, is provided wide powers for search and seizure through dawn raids, and would be entitled through a warrant to inspect company records, employee records, and both company and personal electronic devices.

Cape Gate responded to the allegations stating that it believes the search warrant is unlawful and that it plans on instituting legal proceedings to have the warrant set aside. The warrant was granted ex parte, meaning it was granted in the absence of the affected parties, and thus Cape Gate believes it has the right to institute proceedings against it. Cape Gate alleges that the SACC did not disclose all the necessary information to the Court when it applied for the warrant. Dorothea Ziegenhagen, the CEO of Cape Gate, stated that the company denies any wrongdoing and asserts that its operations fully adhere to competition law.

Interestingly, in 2025, the Competition Tribunal found Cape Gate guilty of being involved in the fixing of prices in the scrap metal market. Cape Gate denied this and has stated that the calculation was decided on in terms of transparent negotiations between buyers and merchants and has maintained that the SACC and Department of Trade and Industry knew of the negotiations and failed to acknowledge such. Cape Gate lodged an appeal with the Competition Appeal Court which is expected to be heard by the end of March 2026.

Commissioner of the SACC, Doris Tshepe, had indicated in a statement that the scrap metal market forms part of industrial intermediary products, one of the priority sectors monitored by the SACC, and thus false coordination of purchase prices may materially interfere with pricing in the downstream steel value chain. Commissioner Doris Tshepe further provided that dismantling any alleged price-fixing cartel in the scrap metal market would significantly assist in getting rid of artificial barriers to entry and foster a favourable environment for all firms, especially small firms and businesses owned by historically disadvantaged persons to contribute to the market.

The dawn raid comes as a surprise, particularly given that while dawn raids are certainly an effective investigative tool that may be utilised by the SACC as part of its enforcement efforts, the use of dawn raids has been significantly limited in recent years, with the last dawn raid conducted in 2022 on a number of insurance firms. The dawn raids, however, indicate the SACC’s continued commitment to enforcement in the metal sector.

Ethiopia Competition Agency Files Charges against Fourteen Metal Producers

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By AAT Senior Contributor Stephany Torres

On 28 January 2018 the Ethiopian Trade Competition and Consumer Protection Authority (“TCCPA”) filed charges against fourteen Ethiopian rebar, corrugated sheet, steel tube and pipe producers and seven rebar importers respectively for allegedly fixing prices in contravention of Article 7(1) of the Ethiopian Trade Competition and Consumer Protection Proclamation (“Article 7(1)”), which provides that “(1) An agreement between or concerted practice by, business persons or a decision by association of business persons in a horizontal relationship shall be prohibited if:…(b) it involves, directly or indirectly, fixing a purchase or selling price or any other trading condition, collusive tendering or dividing markets by allocating customers, suppliers territories or specific types of goods or services”.

It is worth mentioning that in most jurisdictions, which have an active competition law enforcement regime in place, ‘cartel conduct’ (i.e. price fixing, market allocation and/or collusion) is a per se prohibition in that the conduct is prohibited outright, without an examination of the actual effects on competition and without permitting a showing of net efficiency or other pro-competitive defensive arguments.

Where cartel conduct is prohibited per se, the relevant competition authorities require no further proof other than the existence of the agreement or concerted practice which underpins the conduct.  The conduct is simply presumed to have negative effects on the relevant market.

Article 7(1) of the TCCPA, however, is not a per se prohibition and is based on the ‘rule-of-reason’ standard – effectively permitting respondents to lead evidence demonstrating that the alleged conduct can be justified by pro-competitive, technology or efficiency gain justifications which outweigh any anti-competitive effect.

From a policy perspective, Africa competition lawyer Michael-James Currie notes that the permissibility of the ‘rule of reason defence’ is largely due to the fact that a respondent who is found to have contravened Article 7(1) of the TCCPA is liable to a penalty calculated at fifteen percent of the respondent’s annual turnover. This is a prescribed penalty. For non-cartel conduct, the penalty ranges between 5-10%.

Of the aforementioned fourteen Ethiopian steel producers; three manufacture reinforcement bars, namely East Steel PLC, Habesha Steel Mills PLC and Saint Nail PLC.  Six are involved in manufacturing corrugated sheets namely; Ethiopian Steel Profile, Ethiopian Steel PLC, Kombolcha Steel Products Industry PLC (KOSPI), a subsidiary of MIDROC Technology Group and Bazeto PLC and amongst the five manufacturers of steel tubes and pipes are Walia Steel Industry PLC and Mame Steel PLC.

The seven rebar importers accused of price fixing include Dag Trading PLC, Aberus PLC, Berhe Hagos PLC, Marka Trading, Beranea Yeshene and Haileselassie Amabye PLC.

Andreas Stargard, competition counsel with Primerio Ltd. notes that the trigger event for engaging in the alleged price fixing was the fifteen percent devaluation of the birr by the National Bank of Ethiopia (NBE) in October 2017 which may have influenced retailers and wholesalers to look for ways of recouping losses by raising prices for their goods and services.

It is, however, in fellow Primerio Director John Oxenham’s view, unlikely for a well-executed price-fixing cartel to be created ad hoc without any pre-existing information exchange structure.  Therefore, pre-existing trade association, interest groups or other vehicles are commonly used as the enabling platform for competitors to engage in collusive conduct.

The defendants are scheduled to submit their response to the Tribunal on February 20, 2018.

The metal and related products sector is a priority sector in Ethiopia and the Ethiopian government is investigating a greater number of business entities involved in the production and importation of metal and metal related products who are also suspected of allegedly fixing prices.