It is reported that the cost of cans could rise by between 35% and 40% in April 2009 after ArcelorMittal South Africa told customers this week that it would increase the price of tin plate steel by almost 80%.

Mr Graham Hayward a spokesman for Nampak said that ArcelorMittal SA had notified the packaging group of the hike in tin plate prices as well as two other steel products used in packaging, which would increase in price by between 69% and 79%. He added that steel made up half the cost of a can.

It may be noted that ArcelorMittal SA said in a note to its tin plate customers that it will review the prices again after six months, for a possible adjustments from October.

Mr Geoff Feldon MD of Metalix said that the price of tin plate had increased by 17.5% in 2008, so the total increase in the year to April was 98%.

Mr Sven Lunsche a spokesman for ArcelorMittal SA confirmed the tin plate price increases and said the hikes would take effect from April 1st 2009. He added that "The adjustment is based on a long standing formula that comprises a basket of prices from a number of international markets, including the US, Germany, France, Italy, the UK, South Korea, Taiwan and China, to which the ruling rand-dollar exchange rate is applied."

(Sourced from www.busrep.co.za)