ArcelorMittal South Africa said that it will lower the prices of some of its steel products and reduce the Sishen surcharge due to a fall in international iron ore prices. The price reduction will take effect for deliveries from July 1st 2010.
It added that it will decrease the price of flat steel products by between ZAR 190 a tonne and ZAR 715 a tonne, depending on the product. Its long steel products will fall by between ZAR 300 tonne and ZAR 715 a tonne.
The company also said that it will reduce the Sishen surcharge, applied following the dispute with Kumba Iron Ore over an iron ore supply contract, will be cut by ZAR 188 a tonne to ZAR 525 per tonne.
Kumba and ArcelorMittal are in the process of deciding an interim iron ore pricing agreement while arbitration, forecast to last up to 18 months, is taking place.
The dispute is over a contract where Kumba supplied a set amount of iron ore to ArcelorMittal at a price of 3% above cost of production. Following the loss of rights to part of the Sishen mine Kumba said it wanted to break from the contract and sell at market prices.