Steel demand at high levels

Steel customers should prepare for another possible rise in the price of mill sections of £20 to  £30 per tonne around May warns the BCSA, following rises of £20 per tonne in October 2005 and in February this year.

But these sections price increases are thought unlikely to push the price of fabricated steelwork beyond the 5% increase already projected by BCSA for 2006.

BCSA Director General Dr Derek Tordoff says the situation beyond June is harder to predict, but any further increases are not expected to be at levels higher than those for May.

Dr Tordoff said: “All construction products are currently facing raw material and energy price increases and, although steel is not the worst affected material, these pressures, combined with higher steel demand levels, lower stocks and higher prices in other regions of the world, are resulting in the steel mills indicating that the conditions are right for them to introduce higher market prices for structural sections.”

It is understood from the sections supply chain that stockholders/distributors, which have seen their margins squeezed in recent months, are likely to recover the price increases and more at the earliest opportunity.

Plates products prices are thought to have reached their base line and some price recovery will emerge in the spring.

Steel construction demand is currently at very high levels, with order books extending into the autumn and beyond. BCSA says new project enquiries reported by members are good and, with steel continuing to win market share, the forward workload projections for 2007 are excellent.