Steel outlook stabilising

Demand for constructional steelwork is rising and the outlook for prices is stabilising, BCSA President Tom Goldberg told the National Dinner in London on 8 March.

Tom Goldberg, President, BCSA

“Steel construction is doing well, despite the 60% price rise in our raw material in 2004, and we are in an environment where our prices are now expected to be much more stable,” he said. “Price rises for steelwork in 2005 should be of the order of 5%. Demand in the UK is nearly as high as in the last boom of 1988/89: it now totals 1.3M tonnes, and we are gaining market share in a number of key sectors such as residential, hospitals and education.”

Mr Goldberg said prices are now sufficient to maintain a healthy level of investment by BCSA members in areas like machinery and in research and development of innovative products and methods. He added that a range of measures were in hand to make the industry even more competitive, and the industry was committed to finding better ways of delivering service to its customers.

BCSA was also striving for operational effectiveness and efficiency in-house and in the past year a review of the organisation and strategic planning had been undertaken. Sister organisations worldwide had been examined, and new strategies and work programmes instituted as a result.

Philippe Varin, Chief Executive, Corus Group

Guest speaker Mr Philippe Varin, Chief Executive of Corus Group, said construction was the most important market sector for Corus and he aimed to be a value player in steel in construction. Conditions in the steel market were significantly better than they had been for some years. Corus had made a lot of progress recently and a turning point had now been reached. The worldwide demand/supply balance for steel would remain tight as China and other markets grew.

Corus aimed to replicate the success of the UK constructional steelwork industry in capturing dominant market shares in the commercial and industrial buildings markets in other European countries. In the UK residential construction had been identified as a priority for growth. To achieve these and other goals Corus recognised that it had to work alongside its customers.

Mr Varin said consolidation in the steel industry would continue and he expected to see the growth of truly global steel companies. The top five producers in Western Europe account for more than 60% of total steel production; in North America 50% and in Japan, about 80%. But the top five producers in the world account for under 20% of global steel production.