South African Iron And Steel Association: Alleged Price Collusion Due To Domestic Price And International Price

The South African iron and Steel Association was accused by the fair competition commission of South Africa. Members of the association used collusion and meeting opportunities to collude with each other through exchange of product price catalogues and agreement fixed discount rates, so as to achieve the purpose of price monopoly.

In July 18th, the South Africa fair competition committee announced that according to the testimony provided by a member of the South African iron and Steel Association, the association had been controlled by members seeking monopoly prices.

According to the evidence, in June 19, 2008, the South Africa fair competition commission raided the South African Iron and Steel Institute and its two member headquarters and searched a large number of documents.

According to the South African business daily, South Africa's domestic steel consumption group complained that they were forced to pay at least 20% more because of the collusion of their manufacturers.

South Africa's largest steel producer, South Africa, Mittal

The explanation for its domestic price is higher than the international price. The domestic price is closely related to the international price, including China. The domestic price includes the incidental charges such as sea freight in international price.

Conspiracy exposure

South Africa is the twenty-first largest producer of crude steel in the world, and the largest steel producer in Africa. The total output in the 2007 years was 8 billion 985 million tons, accounting for 48% of Africa's total.

The members of the South African iron and Steel Association include all 6 domestic steel producers.

Although the South Africa fair competition committee did not specify the identity of the whistleblower in the announcement, on Thursday, a statement by Anglo American Group, the largest mineral company in South Africa, said that Scaw Scaw, a subsidiary of 74% of its holdings, had applied for the company's leniency policy.

The terms permit that Scaw company will be exempt from prosecution, fines or other punitive measures if it conducts comprehensive, continuous and complete cooperation on the ongoing investigation.

The fair competition commission has approved the Scaw's pardon qualifications based on the information provided.

Scaw is a member of the South African iron and Steel Association. Its internal certification led to the June 19th competition of the fair competition commission.

"We have received complaints that South Africa, as a steel exporter, is paying the international price for domestic steel consumers," said South Africa's fair competition commissioner. "At the same time, a number of suspected companies have raised the price of steel almost the same amount in the same time."

The rising cost of steel has seriously affected the large-scale infrastructure projects in South Africa.

South African local media said it included the new power station of South Africa's national power company, the expansion of South Africa's National Airport, the city of the province of the city of Horton and the World Cup soccer tournament for 2010.

Run Bbu Ruhs, a member of the fair competition committee, said, "because the South African government has designated the infrastructure industry as a country.

The main driving force of the development plan is that the steel industry plays a decisive role in infrastructure construction. "

Involving the entire industry chain

However, for the above-mentioned allegations of the fair competition committee, Dieter Rich, Secretary General of the South African iron and Steel Association, told the newspaper that "the decision of the fair competition committee is very shocking."

He further explained that "in the light of the contents of the conference, we have formulated and implemented very strict policies.

This association focuses on industry health, safety and environmental protection issues.

The topic of price, sales and market share has never been discussed.

He also said that the South African iron and Steel Association is confident that it has not violated the fair competition law.

But the documents seized by the fair Commission show that the producers, as members of the South African iron and Steel Association, have even set the price for the acquisition of scrap iron.

In addition to the competitors who are supposed to be competitors, they redistribute the scrap iron used throughout the country.

"The price monopoly of this industry involves the whole steel

The chain includes scrap iron recovery, raw material allocation and sales price determination.

The South Africa fair competition committee said.

South Africa's Radamation scrap iron refining group was fined 145 million Rand for alleged allegations.

In less than a month after the raid, the company's chief executive, South Africa Company, chief executive of Mittal Steel, the world's largest steelmaker, explained that its domestic steel prices were based on the international market price, including China, rather than the lower export price of South African steel.

"The price of rebar in South Africa is currently between $1050 and $1100."

Mittal company sales manager Winter told this newspaper.

The chief executive of South Africa Company, Mittal Steel, explained that when domestic prices were fixed on the international market, he thought that if South Africa consumed groups to buy steel products in the international market, they would also have to pay extra charges such as sea freight.

She also proposed exchange rate factors linked to international prices.

The current steel price is based on 1 US dollars: 7.6 Rand, when the South African currency appreciates, the domestic price will be cheaper than the international market, and vice versa, "consumers should be aware of the influence of Rand's dollar exchange rate on the price".

"If this investigation is successful, those consumers who are harmed by the price monopoly will be able to make economic claims through civil litigation."

Cohen told our reporter.