Steel firms raided

Robert Laing

Robert Laing

Three companies suspected of steel price collusion were simultaneously blitzed by Competition Commission investigators last Thursday.

The three were South Africa's second largest steelmaker Highveld Steel and Vanadium Corporation, Murray & Roberts' wholly owned scrap dealer Cape Town Iron and Steel Works (Cisco), and industry body South African Iron and Steel Institute (SAISI).

Thulani Kunene, the Competition Commission's divisional manager of enforcement and exemptions, said an investigation into Highveld was initiated in April because its price increases appeared to be suspiciously close to ArcelorMittal's.

"Those are not the only three suspects in this case. But we decided the investigation would be best served by raiding those three on the same day at the same time. We will decide on how to proceed further once we have examined the evidence," Kunene said.

The investigation into Highveld and other smaller players is a new twist in the two cases against dominant steel producer ArcelorMittal. While the global steel giant is appealing against an administrative penalty set by the Competition Tribunal, which found it guilty of charging monopoly prices for flat steel, charges of it abusing its dominance of the long steel market are being brought against it.

Kunene said that unlike the two ArcelorMittal cases, the commission initiated the investigation into Highveld and other smaller players itself.

Instead of competing against ArcelorMittal, Highveld and others are charging import parity prices, pocketing the savings in shipping instead of helping local factories compete globally.