Changes in steel markets over the past decade have removed the need for prices surveillance of BHP's steel mill products, according to an Australian Competition and Consumer Commission inquiry.
A Commission report has recommended that the Commonwealth Government revoke the declaration of three companies that are part of BHP Steel. The companies have been declared - and their prices vetted - under the Prices Surveillance Act since 1986.
The ACCC's recommendation was based on a number of developments since the initial declaration of the steel products. These were:
- lower tariffs on steel products and increasing imports for some products;
- continuing technological developments which are likely to make entry into the product markets more feasible in future;
- falling real average prices of the declared steel products;
- smaller price increases relative to building products and manufactured goods generally;
- prices for a substantial proportion of declared products had been restrained in recent years;
- customers acknowledged significant improvements in services;
- substantial improvements in productivity; and
- no evidence of sustained high profitability.
The ACCC report suggests informal monitoring would be adequate to track the impact of industry developments on steel prices in Australia. BHP has agreed to provide suitable information and this can be supplemented by data from other sources.
The ACCC decision takes into account the wider array of measures available to the new statutory authority under the national competition regime. Direct measures to protect competition are available, if required, under the Trade Practices Act. It also retains the option of reverting to prices surveillance or formal price monitoring should substantial pricing problems emerge in the future.
It is the Government's role to determine whether the recommendation is adopted and the declaration revoked.
Copies of the report are available from all ACCC offices.