JOHANNESBURG - ARCELORMITTAL South Africa (Amsa), Africa’s biggest steel producer, will hike steel prices next month in response to steep higher international prices, it said yesterday.
Amsa customers can expect to pay 4.3percent more for flat steel products and 4.4percent more for long steel products with effect from September 1.
A spokesperson said yesterday it was common practice for all steel makers to review prices monthly in line with market movements in the price of steel and raw materials globally.
“International prices of steel products and of steel making raw materials have increased significantly over the last three months; some up to more than 25percent,” the company said.
It said Amsa was committed to fair prices in the domestic market aligned to international average domestic prices around the world and domestic market conditions, as per the fair pricing principles agreed with the government.
“Creating a sustainable and profitable business is critical to ensure that the steel industry can continue to play its part in the future growth and development of the country,” the company said.
Amsa, the Vanderbijlpark-headquartered steel giant, has been bleeding cash, posting bleak financial results in the first half of 2017.
Last month, Amsa reported R1.16billion headline losses, for the first half of this year. It blamed the poor performance on the stronger rand, weakening domestic economy and higher coking coal and iron ore costs.
The losses were despite the government's move to introduce 10percent tariffs on various steel products in a bid to shield the industry from cheap imports.
However, Amsa chief executive Wim De Klerk said last month that despite the import duties and the designation of local steel for government infrastructure projects, half a million ton of steel was still imported into South Africa in the first half of the year.
De Klerk said the fair pricing model approved by the government last year was being implemented for flat steel product.
Earlier this month, it said it had initiated consultations with employees regarding its proposed business-restructuring programme, which could result in job losses.
The company did say it was possible, however, that more than 50 employees could lose their jobs, which “means this will fall within the ambit of a large-scale retrenchment”.
The JSE-listed company currently employs more than 8600 people directly and more than 3200 contractors.
Trade unions Solidarity and the National Union of Metalworkers of SA said previously that they had received the Section 189 notification in terms of the law of its restructuring plan. They also vowed to fight against the retrenchments.
- BUSINESS REPORT