ArcelorMittal South Africa (ArcelorMittal SA), a subsidiary of the world's largest steel producer ArcelorMittal, is planning to raise its steel prices in July for the first time since September last year in line with international market prices.
Accordingly, the company is considering increasing its flat steel prices by between four to five percent and its long steel prices by between five to six percent in July, but it will not raise prices in June compared with May.
Therefore, in July the base price for all flat steel products will rise by ZAR 250/mt (US$30.8/mt) on average, while the base price for all long steel products will rise by ZAR 300/mt (US$36.9) on average, excluding value added tax.
"This is the first increase in most steel product prices since September last year. Between September 2008 and May 2009, ArcelorMittal SA's steel prices have declined by over 60 percent on average," the company said in a statement.
Under the terms of the agreement between the company and its customers, ArcelorMittal notifies its customers a month ahead as regards price rises but does not provide the same notice when prices remain unchanged or fall.
On the other hand, the Corex furnace at ArcelorMittal South Africa's Saldanha plant will remain out of commission for 10-15 days for repairs after it suffered an explosion on May 26.
According to the company's spokesperson Sven Lunsche, the furnace was closed after liquid iron came into contact with cooling water pipes causing explosions and a cloud of steam. Even after repairs to the furnace, it will take a few days to ramp up to its previous levels of production.
Saldanha's sales orders will be placed with the company's main Vanderbijlpark plant and other facilities within the global ArcelorMittal Group.
US$1 = ZAR 8.13