ArcelorMittal to supply materials to Evraz Highveld Steel subsidiary
ArcelorMittal SA (Amsa) has agreed to supply blooms and slabs to a subsidiary of Evraz Highveld Steel, which is in business rescue, for processing into heavy structural steel, it said on Thursday.
Amsa is SA’s largest steel mill and Evraz Highveld, until its collapse last year, was the second-biggest. Highveld Structural Mill (HSM), which can make steel structures used in very large buildings, is Evraz Highveld’s most attractive asset.
Amsa said the agreement was conditional on the levying of protective duties on the products manufactured in the mill, which required finalising an application to the International Trade Administration Commission.
The agreement would be for two years at first, with an option to extend it for a year, and the mill should restart next year.
Amsa has an option to purchase HSM, subject to certain regulatory and governance approvals, it said.
Global steel researchers MEPS said on Thursday global steel prices have been increasing over the past year. MEPS’ global steel price index rose in December by a third compared with the same period last year, driven mainly by flat product values.
MEPS is forecasting another strong increase in prices in the first quarter of next year, driven by higher input costs, both iron ore and coking coal.
"However, MEPS predicts that a prolonged recovery in world steel prices is unlikely unless a significant change in market fundamentals develops," it said.
Amsa’s share price fell 3.57% to R11.08 after the announcement.