Friday, April 04, 2008

South Africa: Fourth Steel Price Hike on Way

If we think that steel price rises in Europe and North America are high, then spare a thought for South Africa, where things are worse.

The following is an extract from an article by Mathabo Le Roux, writing from Johannesburg.

STEEL users will have to brace for another hefty price hike - the fourth this year - as the weaker rand and rising input costs drive prices higher.

The coming increase will bring the total price hike for the year so far to 60%, putting the squeeze on consumers and adding pressure to inflation.

Steel producer Arcelor Mittal SA said on Friday that steel prices would increase by between 20% and 22% in May, translating into an average increase in the price of flat and long steel products of R1200 a ton.

Galvanised steel prices will rise even more -- by between R2134 and R2366, depending on product specification.

This follows price increases ranging between 9% and 18% for every month since the start of the year.

The price hikes were driven by global steel price movements, Mittal spokesman Tami Didiza said on Friday.

"We have in the past month seen continued upward movement of steel prices on world markets, and this has again created a substantial gap between international prices and our own domestic price," he said, adding that future price rises were possible, depending on how the exchange rate held up.

Since the Competition Tribunal ruled against the steel giant in an excessive pricing case last year, Mittal's price increases have consistently been met by outrage.

Read the full article

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