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Corus blames price hike on energy costs

MATERIALS Steelmaker says rise was unavoidable but contractors unhappy at lack of warning

STEELWORK contractors face reduced profits after the sector became the latest to be hit by spiralling energy prices.

Anglo-Dutch steelmaker Corus announced last week that it would slap a £20-per-tonne price increase on steel sections by the end of the month and increase the price of its coated steel products by as much as £48 per tonne.

The move follows hard on the heels of price increases at the turn of the year aimed at propping up softening steel prices.

The latest hike represents an increase of around 3 per cent on current steel section prices from Corus.

The producer also claimed that continued high raw material costs and solid demand for steel in the UK meant there was little option but to raise prices.

Corus sections general manager Jonathon Sochart complained that it had been impossible for the giant to absorb these price rises.

He said: 'The constant upward pressure on input costs means that we have to share the burden around.' Mr Sochart claimed that increased demand for steel in mainland Europe had also influenced the decision to up prices and called on customers to be pat ient.

He said: 'It is important that we work closely with our customers to maintain product quality and service and that they fully understand the decision to apply the price rise, which comes at a time when stocks are low and demand from mainland Europe is firming.' But some steel fabricators complained that they had not been given enough notice of the price rises and that they would have little choice but to absorb the costs.

One Yorkshire-based steelwork contractor complained: 'I can accept that they have to put prices up because of extra energy costs but I do not accept that Corus could not give us more warning.' Gordon Ridley, managing director of Burton-based Conder Structures, was also bit ter about the lack of notice from Corus.

He said: 'All fabricators are on fixed price contracts and therefore have nowhere to go to recover this extra cost.

'Through the British Constructional Steelwork Association we asked Corus for three months' notice of price rises but for some reason they have found this difficult to do. We will have to stand the loses.'