Steel Yourselves For Higher Prices Warns Steel Supplier

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The boss of the UK’s largest supplier of steel and aluminium frame reinforcement for window and doors says the industry needs a reality check - with higher prices set to stay.

Paul Sullivan of the Anglo European Group, has warned that the widely reported increasing prices for steel and aluminium will not be going away despite other suppliers playing the fact down.

Sullivan made his comments as reports continue to circulate about price rises in a broad range of commodities, including steel, aluminium and PVC-U resin, prompting suppliers to the window and door industry to impose surcharges on supplies

 “The cost of steel especially, will continue to climb for the foreseeable future and prices will remain high for the next 12 to 18 months at least. If prices cool at all, they will never return to pre-pandemic levels.”

– Paul Sullivan 

CEO, Anglo European Group

Here to stay

"To pass on these price rises as ‘surcharges’ gives a false impression that it is simply a short-term issue. We need a reality check,” added Anglo European's CEO. “The unparalleled volatility in the global price of steel is the result of a number of factors. “These include the cost of iron ore, closure of a number of steel mills because of plummeting demand during the early stages of the pandemic and the permanent closure of others. Production curbs in China and a surge in consumer demand as the pandemic lifts in markets around the world are also contributing factors. Neither should we forget that whilst we in the UK are heading out of the pandemic, in many countries the disease is still surging. When these countries, such as Brazil and India for example, eventually recover then pressures on steel supply will further increase.”

Taking advantage

Sullivan also believes that steel mill owners are taking advantage of the rises in Global demand to shore up profitability. He said: “The unrealistically low prices of steel pre-pandemic have also contributed to the closure of some mills and we are now paying the penalty for that. I have been told privately ‘why would the billionaire owners of steel mills choose to start manufacturing more steel when they have managed to make less and push prices to £1,200 per tonne?'

"The mills are very happy making far less product for double the price of last year."

Price review in a new world

Tendencies for fabricators and installers to limit increases in prices to annual or even six-monthly rises should be reviewed, suggests Sullivan: “Steel is just one commodity that will face continued price volatility during the foreseeable future and the reluctance of suppliers throughout the supply chain to limit price rises to once or twice a year, may result in business failures.

“This is the new world - companies should be prepared to pass on these rises as they occur to their customers, including to homeowners at the end of the supply chain in our sector. That is crucial to ensure operating margins are not destroyed.”

Picture: Steel prices are going to continue to rise says Anglo Europeans Paul Sullivan.

www.angloeuropeangroup.co.uk

Article written by Cathryn Ellis
18th June 2021

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