Johannesburg — ONE of the bizarre consequences of the Competition Commission's investigation of the steel industry is that SA is now one of the few countries in the world that no longer has statistics on its steel output.

Check the website of the industry association, the South African Iron and Steel Institute (Saisi), and you will find that the most recent industry numbers date back to the beginning of this year -- and even those numbers were no more than an estimate, because certain of the steel companies were so scared of collusion allegations that they stopped giving figures to Saisi.

And well they might be. The institute is one of the parties against whom the commission has now, in effect, brought charges of collusion. Indeed, it's Saisi that's alleged to have hosted the meetings of the cartel that the producers of long steel products -- ArcelorMittal SA , Scaw, Cape Gate and Cape Town Iron Steel Works -- are accused of running.

The commission and its boss, the Department of Trade and Industry, have long worried about steel industry pricing and this investigation began last year with the commission raiding Saisi and certain of the steel companies. One of those, Anglo American- owned Scaw Metals, then turned state's witness. It took advantage of the commission's corporate leniency policy to turn itself in, and provide evidence on the cartel in return for immunity from prosecution.

Now, more than a year later, the commission has referred the case to the tribunal, asking for heavy fines to be levied against ArcelorMittal and Cape Gate for their participation in the alleged cartel . It should be an interesting case, not least because though Scaw told the commission of a "long standing culture of co- operation among the steel mills regarding the prices to be charged", it seems to have been more a case of the smaller mills following the lead of the dominant ArcelorMittal. So it is likely to raise critical questions about what, precisely, constitutes a cartel.

It may also raise the question of whether anticompetitive behaviour still prevails . The accusations mainly cover the period 2002- 06. Much has since changed , at ArcelorMittal and in the industry as a whole.

The competition authorities are doing much to open up markets and root out the cosy culture that used to rule South African business, and steel may be a natural target for their efforts. But how much difference will these make? Will domestic steel prices be lower in five years' time than they are now? Will new and more competitive steel producers enter the market?

We would love to think so. But in the real world things aren't that simple. Steel prices trend with the cycle: they are about 60% lower now than they were a year ago, and are unlikely to go much lower. And the steel industry is a highly capital intensive one that isn't likely to attract new investors any time soon, particularly in SA. So while the competition authorities' efforts to instill a more competitive culture are to be lauded, they may not have much practical effect in this industry at this stage.