Soaring Steel PricesFriday, 7 March 2008
ADCAS WARNS THAT SOARING STEEL PRICES WILL LEAD TO INCREASE IN THE COST OF DUCTWORK ADCAS* has told the UK building services industry to prepare for a significant rise in the cost of ductwork. The Association, which represents both ductwork manufacturers and suppliers of associated components, warns that the impact of rising steel prices cannot be avoided. As a result ductwork systems may cost 10-15% more. "We've been told that the price of steel could rise by as much as £100 a tonne by the end of this year," said ADCAS President Paul Roxburgh of Boyd and Company. We buy 3-4 tonne steel coils to produce rectangular ductwork and it isn't hard to see how such a rise in the cost of our raw material would affect us. "Spiral ductwork prices are also under threat as Iain Robertson, Joint Managing Director of Lindab Ventilation made clear. "Since Christmas we've seen a 25% rise in the price of galvanised steel for the next quarter - and our products are 99% steel! Our suppliers report reduced allocations and have warned us of further increases in the pipeline. It's a volatile situation that makes it difficult to produce accurate price lists."
Steel industry sources reveal that the mechanism driving up prices appears different to that which caused similar problems 3-4 years ago. Then steel prices soared because of demand from the East and from China in particular. Now China and India have reduced exports of steel and Russian prices are too high - so lack of competition means that there's no balancing force on current market prices. |
 |
