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Steel price to rise again

MATERIALS - Cost of structural steel set to go up a further £40 per tonne in the autumn, experts have warned

STRUCTURAL steel contractors hit by summer price hikes face further misery in the autumn.

Industry insiders anticipate that a move to ratchet up structural steel prices at the beginning of the summer will be followed by a similar move in September.

That price increase is expected to be on the same scale as the May hike ? about £40 per tonne on all structural sections.

And with steel producers already slapping an extra £20 per tonne on steel sections in February, a price increase of £40 would take the total rise over the year to £100 per tonne, the largest surge since structural steel prices doubled during 2004.

Industry body the British Constructional Steelwork Association has been forced to double its 2006 price inflation prediction for fabricated steelwork from 5 per cent to between 8 and 10 per cent.

Dr Derek Tordoff, BCSA director general, said: 'The construction industry on mainland Europe is enjoying something of a boom at the moment and European steel producers have full order books dealing with demand on the Continent.

'Traditionally some of this steel would have found its way into the UK and helped keep prices down but that is not likely to be the case this summer.' Alan Todd, general manager at Corus Construction & Industrial, also blamed continuing pressure on raw material and energy prices for the increases.

He said: 'Steel is a world commodity now and with the construction industry in Germany showing signs it has stabilised and positive forecasts for the rest of Europe, we feel that the market can stand these sorts of increases.'

Despite the severity of the hikes, Mr Todd was quick to point out the sector was not facing increases of the scale of 2004, when increased demand from China caught the steel industry on the hop.

He said: 'The whole industry is much more stable than it was in 2004. Two years ago the problem was that we could not forecast steel prices with any accuracy.

'The sector was much more volatile.

Now the industry is more stable and we are able to predict price fluctuations with greater accuracy.'

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