The country’s largest steel producer, ArcelorMittal South Africa, confirmed on Friday that it would increase the prices of its flat steel products by 10% and long steel products by 12% as of March 1.

Explaining the motivation behind the price hike, spokesperson Tami Didiza said that the international steel market was currently experiencing significant price increases.

“Products such as hot rolled coil and low carbon wire rod are selling above $700 a metric ton which is well above our domestic prices.”

The company also implemented a price increase on Friday, which involved hikes of between 5% and 10% for flat steel products and between 3% and 8% for long steel products.

Nedcor Securities equity analyst Troye Brady said that he was “not surprised at all” about the price hikes, as they reflected what was happening internationally.

He explained that in China steel prices had gone up by some $65/t, owing to factors such as power problems, the high cost of raw materials – specifically higher costs of iron-ore and coking coal – and government-imposed export duties.

Brady added that a shortage was developing the Far East, and that the situation was tight for the industry as a whole.

He projected that the steel price would potentially go up by $100/t in the upcoming months and the domestic price would mirror this.

To subscribe to Engineering News's print magazine email subscriptions@creamermedia.co.za or buy now.