Johannesburg - ArcelorMittal South Africa said on Friday that the country’s government had approved a new pricing model for flat steel products aimed at bolstering its steel sector. The steel maker was fined a record R1.5 billion in August for colluding to fix steel prices.
The Department of Trade and Industry (DTI) said on Friday that the government was intervening to save the steel sector with various measures.
The government formed a team six years ago to find ways to lower domestic steel prices after consumers complained about ArcelorMittal’s prices.
The local price for flat steel products would be calculated on an import weighted basket price, ArcelorMittal said.
“This agreement and the commitment by the government and the company will no doubt make a valuable contribution to the sustainability of the steel industry, and in particular, the downstream industry,” ArcelorMittal said.
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The DTI said the downstream, labour intensive sectors of the economy remained a priority for South Africa, the largest steel producer in Africa with almost 60 percent of Africa’s total production.
Since the onset of the global steel crisis in 2015 characterised by massive oversupply, depressed prices and increased imports, the dti and the Department of Economic Development have developed a package of measures to save the industry from the immediate threat of closure and subsequent loss of capacity.
“Globally steel is by far the most important input into manufacturing and hence the interventions and collaboration across government and industry to work towards the long-term viability of the steel value chain is paramount to achieving the objectives set out in the Industrial Policy Action Plan and National Development Plan,” the DTI said.