2008-06-10
BEAMA’s Steel Products Group is on record reporting rapidly increasing raw material prices. With steel leading the way, the Group warns future price increases will impact.
A Group spokesperson commented:
“Steel is now traded on the London Metal
Exchange and therefore a futures market exists. In this respect, its price now
behaves more like that of copper.
We therefore endorse the Steel
Suppliers trade association’s price warning.
“Driven by supply factors, it’s a situation progressively worsening, echoing
the situation of four years ago when the price of steel rose by 50%. With
the UK likely to suffer more than mainland Europe, due to fewer suppliers,
industry sources believe the UK will experience a supplementary increase of up
to $140/tonne. The implications for contractors and manufacturers are
serious.”
The Group cites many factors for steel shortages and consequent price rises.
Notably, home demand from Asia, previously a low cost exporter, has doubled
in ten years making the region a net importer.
However, other, more
fundamental factors have emerged.
For instance, rising fuel costs, dearth of
basic feedstocks - iron ore, scrap, coke.
Industry sources indicate coal prices are now agreed, albeit at higher
levels. However, iron ore contract negotiations are continuing, and the price of
scrap has grown by $500 per tonne.
Arcelor Mittal CEO Lakshmi Mittal said recently: “Steel prices will rise
further in the rest of 2008 as steel producers pass on continued cost increases
to consumers.”
Steel making is a cyclical activity and is currently at a ten-year high.
Markets are strong. The problem is not just price - some stockholders have
allowed stocks to diminish, worried by the financial risk of replacing them at
current prices - this has an impact on availability.
For manufacturers and electrical contractors, all this means uncertainty,
deferments, frustration, inevitable cost penalties.
BEAMA’s Steel Products
Group members - manufacturers of steel cable tray, ladder and support systems -
are reassuring customers they are doing everything possible to get supplies
through the distribution system on time, and at the most competitive prices.
The Group urges contractors, wholesalers and specifiers to be aware of the
difficulties manufacturers are labouring under in this current
climate.
Steel producers started to implement a series of increases in January 2004. .
This was hard on the heels of increases already applied end
2003.
Since then, the world’s steelmaking capacity has been restructured with a few
key global players taking control.
Prices for some grades and configurations
of finished steel stock have doubled in recent months.
This summer will be a critical phase.
ArcelorMittal has announced new
prices for July deliveries, leaving Corus to reveal its intentions. Continuing
pressure could see further announcements this
September.
Electrical
industry manufacturers must continue fulfilling contracts and deliver on time.
Valued customer relationships will be respected, long–standing customers better
placed to receive supplies.
Steel pricing tips for contractors
· Buy steel-based products from
reputable, well-recognised suppliers.
· Check products are
available.
· Confirm actual prices with supplier (days gone of
discounted products when steel supplies once abundant).
· Order in
advance.
· Expect steel prices – and thus of end products – to further
increase.
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Related contacts
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BEAMA
Westminster Tower
3 Albert Embankment
London SE1 7SL
Tel: 020 7793 3000
Fax: 020 7793 3003 |
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Source: BEAMA PR |
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