Iscor to implement new pricing policy
South African steel producer Iscor is reportedly planning to change its pricing policy in October 2004.
As reported by SteelOrbis back in June, after takeover of Iscor by LNM Group was approved by related authorities, Iscor announced that pricing of its products will continue to be US Dollar-based. However as per the recently announced pricing model of Iscor, prices will be set by actual exchange rate calculation rather than the previously used forecast exchange-rate calculation.
The new pricing model will be applied on flat products and the products exported.
Iscor's previous pricing model, which has been found not to be transparent, has created concern among buyers of Iscor's products. Considering the fact that Iscor meets 80% of flat demand in South
Africa, it can be said that the pricing policy of Iscor has put the South African steel industry into difficulty.
Iscor announced that new pricing model will make downstream industries more competitive as they will be able to reduce cost and optimize their capacity utilization.
Meanwhile, LNM had previously announced that it would discuss the pricing policy of Iscor after Competition Tribunal approves the takeover. The new pricing policy of Iscor is not a part of LNM's commitment to the government regarding the pricing policy. In fact LNM announced that no progress has been made regarding the issue so far, however added that the negotiations will soon start.