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Corus confirms price hike as profits drop

MATERIALS - £30 per tonne to be added to the cost of structural steel sections from August

STEELMAKER Corus has confirmed price rises on all structural sections delivered ? not ordered ? from the beginning of August.

The jump came just a day after the producer revealed a first quarter profit of £45 million, down 73 per cent from its £166 million profit for the same period last year.

The Anglo-Dutch steel producer last week unveiled a £30 per tonne price hike on most structural sections and a £40 per tonne increase on certain sizes of columns to be introduced on all deliveries after July 31.

Construction News first revealed the scale and timing of the rises last month. The move will be followed by a further price hike in the autumn.

The later rise is likely to be in the region of £20 per tonne on most sections and will bring the overall increase since October 2005 to around £150 per tonne.

Corus blamed the drop in profits on last year's stabilising market in Europe and increased energy costs.

It claimed the increase in UK energy prices compared to those in mainland Europe had increased operating costs by £20 million during the first three months of the year.

These costs, alongside an increase in demand for material across Europe and the rest of the world, have forced Corus to make the extra charges, according to industry representatives.

Dr Derek Tordoff, director general of the British Constructional Steelwork Association, said the increase would be payable on deliveries, not orders, made after that date.

He said: 'Contractors and subcontractors must realise that these increases are on deliveries. They may have placed an order before the deadline but they could still face paying the extra cash if the steel is not delivered until after that date.' And Dr Tordoff claimed the ongoing takeover battle between steel giants Mittal and Arcelor should not effect the UK construction market because Corus is so strong.

He said: 'Corus controls about 50 per cent of the UK market for structural steel.

Arcelor is the next largest but is some way short of Corus's share.'

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