How do you protect your construction company in the face of rising steel prices?

Construction materials costs have reached a 40-year high, according to the latest Building Cost Information Service Materials Cost Index (BCIS). Steel prices, in particular, have surged significantly over the past few years, with the most recent data showing further sharp increases that are impacting construction budgets across the UK.

Preparation within the construction industry is therefore essential to mitigate the risks of rising steel costs. Here, we examine the recent changes in steel prices, the causes of these shifts, and how your construction business can protect itself.

How Much Have Steel Prices Increased?

Recent years have seen steel prices rise consistently. For example, the cost per tonne has increased significantly since early 2021, with the trend continuing into 2025. Industry reports, such as Elland Steel, highlight that current steel prices have reached levels not seen in decades, impacting both procurement and project budgets.

What Has Caused These Price Hikes?

Several factors have contributed to the recent rise in steel prices:

• Pandemic Disruptions: Covid-19 caused project delays, mill closures, and disrupted supply chains, leading to shortages as demand rebounded.
• Brexit Implications: Trade changes and new tariffs have affected the import and export of steel.
• Rising Energy and Transport Costs: The cost of energy and haulage has increased, further inflating steel prices.
• Global Market Demand: Increased global construction activity, particularly in the post-pandemic recovery phase, has placed additional pressure on supply.

How Do You Protect Your Construction Company?

Adapting to volatile steel prices requires proactive strategies and strong partnerships with suppliers. Here’s how construction companies can protect themselves:

Maintain Strong Supplier Relationships

Trustworthy suppliers keep you informed about market trends and price changes. Open communication ensures you’re aware of any impact on project costs and can plan accordingly.

Include Provisions in Contracts

Contracts should have clear terms for handling price volatility, including clauses for price adjustments or alternative material options. This safeguards your budget and reduces risk.

Negotiate Fixed-Price Agreements

Where possible, negotiate fixed-price contracts with suppliers to lock in costs for critical materials. This can provide certainty even in volatile markets.

Diversify Your Supplier Base

Working with multiple suppliers reduces dependency on a single source, allowing for more flexibility and competitive pricing.

Strategic Procurement

Bulk buying, long-term agreements, and forward planning can help secure favourable rates and ensure materials are available when needed. Monitoring market trends allows for timely purchasing decisions.

Optimise Project Planning and Scheduling

Effective project management ensures that steel and other materials are ordered and delivered efficiently, preventing delays and reducing the impact of sudden price increases.

Design and Material Efficiency

Collaborate with architects and engineers to design structures that minimise steel usage without compromising quality. Consider alternative materials or innovative construction methods that can offset cost increases.

Midland Structures: Your Trusted Steelwork Partner

At Midland Structures, we have extensive experience delivering and installing high-quality steelwork. By working closely with our customers and developing strong relationships, we ensure steelwork is delivered on budget, even amid rising prices.

Our services include design, manufacturing, installation, and additional structural solutions such as staircases, balustrades, and walkways. Our expertise allows us to help clients navigate material cost fluctuations and maintain project timelines.

Rising steel prices present challenges, but with careful planning, strong supplier relationships, and strategic procurement, construction companies can mitigate these risks. At Midland Structures, we are committed to supporting our clients through these challenges by providing reliable, high-quality steelwork solutions. For more information or to request a free, no-obligation quotation for your project, contact us on 01384 411201 or email info@midlandstructures.com.