This comes after concerns were raised about the industry's pricing practices by various interested parties, said Thulani Kunene, head of the commission's enforcement and exemptions division.

The commission received a complaint from a member of the public alleging that Mittal South Africa and Highveld Steel and Vanadium Corporation adjusted their prices for flat and long steel products around the same time and with similar percentage increases.

Kunene said it was well known in the steel industry that Highveld followed Mittal in its pricing. Although this did not imply collusion, it was "suggestive of collaboration" between the two.

"Of concern is that the observed lack of transparency in price setting in the steel industry has a major impact on downstream [building and construction] activities. This is because steel products are intermediate goods and a major contributor to the input costs of various sectors," he said.

Preliminary research into the industry showed that local customers paid prices charged at import parity pricing levels, even though South Africa was a net exporting country. According to IPP a firm sold goods locally at the same price customers would pay if they imported the goods from another country.

On Thursday the commission raided the premises of steel companies, Cape Town Iron and Steel Works Ltd and Highveld Steel and Vanadium Corporation Ltd. It also pounced on the premises of the SA Iron and Steel Institute, an association of steel manufacturers based in Pretoria.

Cape Town Iron and Steel Works was a scrap mill based in Cape Town and a wholly owned subsidiary of Murray and Roberts. Highveld Steel and Vanadium Corporation was based in Witbank and manufactured various flat and long steel products.

Sapa