Mittal Steel South Africa, to increase the prices in August, 2006.

SA steel prices set to rise again in August: Africa's leading steel producer, Mittal Steel South Africa, has released details of yet another set of price increases from August 1, following hot on the heels of the average 5,4% flat-steel increase effective July 1.The July increase was the first broad-based price rise announced by the group since October 2004, with Mittal having cut prices twice in 2005.Mittal Steel South Africa introduced an average flat-steel price increase of 5,4% as from July 1, affecting 85% of its sales.Towards the end of June, domestic steel users received notification of another general adjustment for orders confirmed for delivery from August 1 onwards.The notice indicated that hot-rolled coil prices would rise by 9% and plate by 12%, while the average increase across its flat-products range would come it at around 8%.The average long-product increase for steel to be delivered on August 1 would be six percent. But Mittal cautioned that the previous domestic discounts would also be discontinued, which could affect prices on individual long-steel items by a greater or lesser extent to the six per cent average rise.Corporate affairs GM Tami Didiza confirmed the proposed price increases with Engineering News, reporting that the adjustment was the result of a rise in domestic prices in all the countries against which the South African producer benchmarked its local selling prices.The group does this pricing analysis monthly, using a basket of domestic prices in six countries, including Brazil, the US, Germany, Korea, China and Russia.Particularly hard hit over the last few months has been those steel products affected by the rising zinc price.On June 1, Mittal raised prices on galvanised and colour-coated steel, owing to the tripling of the zinc price over the last six months. The price of galvanised coil and sheet rose by 9%, while Chromadek coil and sheet increased by 6%, and further increases, of 15% and 8% respectively, were introduced on July 1.Mittal has stated that the rise in prices was attributable to a significant strengthening in prices internationally, which had surged by between 20% and 32% since the beginning of the year.Domestic users remain uneasy about the price increases, but close industry observers suggest that they were inevitable given the stronger prices in various markets globally.Nonetheless, Mittal's pricing system remains a contentious and contested issue, with the company defending South Africa's first ever case of excessive pricing at a Competition Tribunal hearing currently under way.The case was referred to the tribunal by gold miners Harmony and DRDGold and has been under way since March. Final argument is now set for the end of November.Meanwhile, Mittal and the Department of Trade and Industry are also continuing their dialogue on the creation of a so-called “developmental” pricing model.Talks resumed in May after breaking down late last year. [From Internet]. Best wishes, Suman Mukherjee India. http://sumanspeaks.blogspot.com/ www.bcozindia.com