Sept. 2 (Bloomberg) -- ArcelorMittal, the world's biggest steelmaker, fell the most in two months in Amsterdam trading after saying it will cut South African prices for the first time in a year.

The company will lower prices for long products, used mainly in construction, by an average of 5.6 percent, Hennie Vermeulen, a spokesman for the company's ArcelorMittal South Africa Ltd. unit, said today in an interview. Luxembourg-based ArcelorMittal dropped as much as 4 percent.

``This is a very significant development,'' Charlie Dove- Edwin, an analyst at MF Global Securities based in London who as a ``sell'' recommendation on ArcelorMittal shares, said in a telephone interview. ``It's the start of prices falling around the world.''

ArcelorMittal, founded by billionaire Lakshmi Mittal, has sought to impose surcharges on U.S. and European customers this year, citing rising demand and record raw-material costs. Prices for steel rebar, used to reinforce concrete, have risen 72 percent this year, according to data from industry publication Steel Business Briefing.

ArcelorMittal declined 3.7 percent to 50.57 euros as of 3:03 p.m. in Amsterdam. Earlier it trade 2.111 euros lower at 50.40 euros, and a close at that price would be the biggest one- day decline since July 2. ArcelorMittal South Africa dropped as much as 6.2 percent to 166 rand.

Other steelmakers also slid. Helsinki-based Rautaruukki Oyj dropped 4.5 percent and Austria's Voestalpine AG declined 2.9 percent. The Bloomberg Europe Steel Index, which tracks 11 companies, fell 3.4 percent, heading for its largest drop in 5 weeks.

Vanderbijlpark, South Africa-based ArcelorMittal South Africa is facing an antitrust probe over steel prices.

To contact the reporters on this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net; Mark Herlihy in London at mherlihy1@bloomberg.net

Last Updated: September 2, 2008 09:25 EDT