THE downstream steel industry, under siege for decades, is facing its next major crisis.For many years, ArcelorMittal SA, the country’s dominant liquid steel producer, found the South African steel market to be a favourable playing field.For a long time it could keep its input costs low as a result of a preferential supply agreement for iron ore. However, while having this lucrative iron ore deal, ArcelorMittal SA charged the South African downstream industry similar prices to what the company obtained on international markets. The downstream industry paid high prices for their steel, while ArcelorMittal SA made huge profits.At the same time, according to Department of Trade and Industry director-general Lionel October, ArcelorMittal SA "took out all its money via management contracts, paid low dividends to shareholders, made absolutely no investment. It sweated its assets to the point where plants were collapsing."These were extremely difficult years for the downstream steel indust...
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