ArcelorMittal SA said Wednesday that it was not planning to reduce steel prices across the board despite a move to cut prices in South Africa.
The world's largest steelmaker has raised prices this year on soaring costs for energy and iron ore, as it also faced less competition from lower-priced Asian rivals.
ArcelorMittal shares sank in South African trading on Tuesday after a company official was quoted in a news report as saying that it would cut prices for steel used in construction — the first price cut from a major steel business.
A South African tribunal fined the company for price fixing last year.
The company said Wednesday that prices in South Africa reflected "specific currency developments and price mechanisms."
"Globally ArcelorMittal will generally maintain its third-quarter pricing levels into the fourth quarter," it said.
It insisted that it was "making good progress" in agreeing substantial price increases for 2009 supply contracts with car makers, packaging and home appliance customers.
If demand slows, the company said it would hold back production to maintain stable pricing.
"ArcelorMittal believes that due to the cost increases in raw materials and steel equipment, steel pricing will continue to remain structurally strong," it said.
Demand for the steel that is used to construct buildings, cars and appliances continued to surge in Asia, Russia and the Middle East, and to grow strongly in Europe, more than compensating for lower sales — but higher prices — in the United States.
I would have some reservations about the claim that demand continues to grow in Europe, all the feedback we are getting points to demand falling rapidly throughout Europe. But then again one would expect one of the world's largest steelmakers to be bullish on steel prices.