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China's steely appetite

2004 REVIEW

THIS time last year UK steel bosses were looking forward to Christmas. It was coming and the geese were getting fat On the other side of the globe though, far from gorging on festive fowl, China's building industry was busily gobbling up as much iron, steel, coal and coke as it could get its hands on.

The purchasing power of the Chinese Dragon sent the prices of raw materials soaring worldwide and had a knock-on effect on steel.

Steelmakers responded by slapping a blanket £15-per-tonne rise on all sections plus a further £8 per tonne surcharge in an effort to off-load further raw material price rises.

But it was nowhere near enough and, after more than a decade of inflation-free steel prices, contractors were in the uncomfortable position of going cap in hand to main contractors to ask for extra cash.

For the first time in 10 years steelwork contractors were forced to introduce price fluctuation clauses because of the spiralling costs.

Hike after hike followed, £35 per tonne in April and further £30, £60 and £30 rises all helped pushed list prices for structural steel sections through the £700-per-tonne mark.

The reinforced concrete sector must have been rubbing its hands with glee, envisaging market share flooding back. But, even with prices spiralling out of control, concrete could not dent the might of steel and the sector has had one of it busiest ever years.More than 1.3 million tonnes of the stuff was fabricated by steelwork contractors over the course of the year, just short of its peak annual production total of 1.5 million.