Dti sets up task team into steel prices

Monday, August 2, 2010

Pretoria - The Department of Trade and Industry (dti) has set up a task team to make recommendations into the viability of local steel production.

In a statement on Monday, the department expressed its concern about the high price of steel in the South African economy.

It said the price of steel was among one of the highest in the world prior to the introduction of the iron ore surcharge that came as a consequence of the private interim iron ore pricing agreement between Kumba Iron Ore (KIO) and ArcelorMittal South Africa (AMSA).

The two companies agreed that the iron ore surcharge would be removed but replaced by an increase in the base price of steel. The increase in the base price will pass through the cost of iron ore to steel purchasers.

The department said the task team, comprising of itself as well as the departments of economic development and mineral resources, has been established to make recommendations on appropriate policy tools.

The team will look into the viability and cost competitiveness of local steel production as well as a competitive steel pricing regime to support the development of value added manufactured products in downstream industries.

"This team will report back to Ministers with its recommendations in the near future," said the department.