iol.co.za reported that ArcelorMittal South Africa has drawn criticism for its decision to discontinue the local production of a specific type of steel used by the automotive industry. ISF is used for the outside panels of some vehicles.
Mr Stefan Haasbroek chairman of the original equipment manufacturers purchasing council, a sub committee of the National Association of Automobile Manufacturers of SA, said that ArcelorMittal had notified motor manufacturers in November 2011 of their intention to stop producing improved surface finish steel from June 2012 but had subsequently pushed the date out to December 2012.
He said ArcelorMittal SA had proposed alternative sourcing from Europe, but each OEM was now conducting studies to find the best solution for their own operations.
He said the council would write to the Trade and Industry Department to express its opposition to ArcelorMittal SA’s decision, which would have a negative affect on the automotive industry’s competitiveness.
Mr Haasbroek said the pricing of steel was based on global prices and the cost to local OEMs would increase because of the additional logistics costs in importing the product.
However, Mr Haasbroek said ArcelorMittal SA's decision would not have a significant affect on local content in domestically produced vehicles.
Mr Themba Hlengani, an ArcelorMittal SA spokesman, said that it had announced at the end of last year that it would be discontinuing ISF material for exposed applications and had changed the end date to accommodate the motor industry. Mr Hlengani said “ISF currently comprised less than 5% of the total supply portfolio to the automotive industry and, given the low volume of demand in South Africa, it was not economically viable to consider further investment in or upgrading of these lines. If required, this material could be supplied from its mills in Europe for use by local manufacturers.”
Source - www.iol.co.za
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