The debate over the price at which Iscor will supply steel to the SA automotive manufacturing industry could soon be resolved.

The debate over the price at which Iscor will supply steel to the SA automotive manufacturing industry could soon be resolved.

Iscor, citing the need to price the steel it sold in South Africa in line with the dictates of the global market, announced a 19,7 per cent January price increase for automotive steels. reported in October that Iscor offered to provide the SA automotive industry with electro-galvanised steel sheet, which is used extensively for motor vehicle body panels, at "competitive domestic pricing to the prevailing price (in dollars) of a similar product on the international market".

But last week, an "agreement in principle" was reached between the two parties and Iscor and the car makers will meet again over the next few days on the issue, reported.

Iscor has said that the price rise will not be too high because of the rand's recent strengthening. The firm’s chief executive, Louis van Niekerk, hinted “that there could even be a price cut” if the rand stayed close to its current levels.

"If we have to reduce our prices, we will reduce prices," he said. However, Van Niekerk defended the company's import parity pricing policy, which he said was practised all over the world.

"Recently, international prices were at 40-year lows, and we reduced local prices to low levels," he added. "If I were to work on a social pricing approach, and not on the free market, I shouldn't be running a listed company."

Some sectors of the SA automotive industry told in October that they had been upset by Iscor's unilateral approach in pushing up prices, saying customers wouldn’t benefit from low-cost local production.

"A dollar-based pricing structure doesn't make sense in South Africa as the steel is manufactured locally, from locally mined ore, using local labour and energy," Naamsa president Ian Robertson said.

A major priority for the Industrial Development Corporation, in its insistence that the local steel industry be restructured, is to ensure that more local steel is sold to the automotive industry, he added.

In an effort to resolve the row, meetings have been held between representatives of Iscor, Naamsa and the National Association of Automotive Component and Allied Manufacturers, the report said.

Naamsa executive director Nico Vermeulen said the agreement between Iscor and the industry had been reached in what he described as "open and frank" discussions.

Vermeulen said Iscor, which in the past year announced plans to expand its presence in the automotive market, had formulated a revised pricing proposal, which was now being tested by the industry.

Original article from Car