On Monday, October 19, the South African Fruit and Vegetable Canners' Association filed a formal complaint with South Africa's Department of Trade and Industry over an "excessive" rise in tinplate prices from ArcelorMittal South Africa (ArcelorMittal SA), the South African unit of the world's largest steelmaker ArcelorMittal.
Accordingly, ArcelorMittal SA may face a probe by regulators over its tinplate prices, which jumped 70 percent in the first quarter of FY 2009.
Commenting on the issue, ArcelorMittal SA spokesperson Sven Lunsche said that the company has yet to receive full details of the complaint but is aware the complaint has been lodged.
"ArcelorMittal raised tin plate prices by 70 percent at the beginning of April, but since then we have dropped our prices by 30 percent," Mr. Lunsche added.
ArcelorMittal SA cut its tinplate prices by 26 percent to 30 percent as of September 30.
"The adjustment is in line with an agreement with the company's key customers in the packaging industry to adjust prices half-way through the annual 2009-10 contract period ending on March 31," ArcelorMittal SA said in a statement, adding "The reduction in prices reflects the strong performance of the rand over the past six months, whereas international tinplate prices have been largely steady," it said.
ArcelorMittal SA sets its tinplate prices on an annual basis starting in April and then reviews those prices mid-year. According to Mr. Lunsche, currency fluctuations, among other factors, led the company to drop tinplate prices by 30 percent from October, the date of the mid-year review.
In 2006, ArcelorMittal South Africa changed its pricing model from import parity pricing to a system benchmarked against a basket of domestic prices from a range of international markets.