Whether you are locked into a longer term deal, buy parts on a spot price, or even if you don’t buy steel parts, it is very likely that you will be affected by the mild steel price increases taking place this year. In fact steel is used in so many products; vehicles, ships, buildings, and electrical goods to name but a few. So if steel isn’t in the products you buy, it is in the building in which you work or the vehicle that brings you your goods.

Customers who have already been affected by rising steel prices have recently been asking us for more information which is what prompted us to make this the subject of our May 2010 newsletter.

When demand is not particularly strong in the UK many people wonder why prices are rising so fast. In fact UK demand has little, if any, impact on the global steel market which has seen relatively small reductions in demand over the last 2 years. The UK in comparison will take around 1% of the worlds steel.

However the steel mills are not blaming demand for their current increases but rising raw material costs. Sure enough the main constituent parts of mild steel, iron ore and coaking coal, did not fall as fast as steel prices fell in 2008/9 so steel mills have been looking to recover those costs. Now this year with both products potentially doubling in cost and demand for coaking coal possibly set to exceed supply, it looks likely that at least some of their price increases will stick.

Whilst there are some justifications for steel price increases it seems we are in a perpetual cycle of steel companies pushing prices up as fast and as far as they can followed by steel consumers pulling the price back down in the same way. The big difference these days seems to be that it is no longer unusual for prices to jump or drop by 25% in a few weeks leaving us all wondering if long-term steel price stability is a thing of the past.

At HTA we build partnerships with our steel suppliers and for some contractual business we offer as much price stability as we are able however eventually these massive price increases are sure to affect us all. We hope that our continuous investment in latest technology high speed manufacturing equipment will help us maintain a competitive advantage as before the market recovers from one problem we seem to be faced with another.