Ductwork fabricators and contractors are being hit by big hikes in the price of steel and warn shortages may be looming
Galvanised steel prices have suddenly skyrocketed in recent months from an average of around £650 per tonne last year to £900t at the end of 2020.
Some stockholders are now quoting up to £1,250 per tonne as certain widths of steel coil become harder to get.
Another ductwork firm told the Enquirer that he had been told to expect prices as high as £1,350 per tonne
Steel coil is becoming harder to get after global mill production slowed due to the pandemic.
Now automotive and white goods industries are competing with construction using their buying muscle to buy up available stocks to meet resurgent demand. This is depleting stocks for lower value manufactured goods.
While steel prices represent a fraction of the fabricated cost of ductwork, contractors are warning pre-tender quoted prices will now have to rise.
One said that for more labour intensive square ducting this was likely to be 3-5% but could go up monthly thereafter.
For spiral ductwork, produced entirely by machine, steel price represents a far greater cost with ductwork forecast to rise by as much as 15%-20%.
Tony Warwick, managing director of fabricator Airtrace, said: “I’ve been in the industry for 30 years, and I’ve not seen pricing changes as extreme as this before.
“Steel stockholders are putting prices up almost monthly and availability has really dropped.”
Malcolm Moss, president of ductwork trade body ADCAS, said: “It certainly not plain sailing at present. Passing on prices is one thing but availability could be a real issue in weeks ahead.
“The problem is you don’t know there is a problem until you are told by your stockholder they don’t have supplies of the wide coil you want.”
“We are concerned that some firms may import European galvanised steel which has a lighter coating weight and is less resistant to corrosion.”
Moss said one distributor had already been approached to substitute products.
He added: “The hope is steel supplies should start to catch up by the second quarter of this year but prices look set to remain high for some time.”
One ductwork contractor in the south east said: “I’m warning customers of issues of availability. At this moment we are still managing to get what we want but at a price.
“Our stockholder is warning they are not taking on new customers and are giving priority to those that paid them well last year.”
Source : https://www.constructionenquirer.com