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 and timber experienced the greatest increases between January and September 2021. And it looks as though this volatility isn’t set to stabilise any time soon as industry analysts expect rises to continue into next year.

Preparation within the construction industry is, therefore, key to mitigating the risks of rising steel costs.

Here we look at the changes in steel prices, the causes of these shifts and how you can protect your construction business.

How much have steel prices increased?

2021 has seen a continual rise in steel prices. The cost per tonne has risen by:

• January: +£50
• March: +£30
• May: +£50
• May: +£100
• June: +£80
• October: +£30 (temporary surcharge)
• November: +£30

What has caused these price hikes?

The past two years have been tumultuous as the world has attempted to navigate Covid-19.

The construction industry has faced significant challenges as a result of the pandemic with projects delayed or cancelled, disrupted supply chains and decreases in demand.

But as restrictions eased, the demand for construction and therefore steel picked up. However with many steel mills having to shut during covid, supply struggled to keep up.

Steel shortages, combined with the implications of Brexit, rise in haulage costs and energy prices have meant steel prices have soared.

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

Protection comes from communication.

What you need are steel manufacturers and suppliers that keep you in the loop. Trustworthy and reliable manufacturers and suppliers are those that are upfront, straightforward and industry experts; they know the steel market inside out and ensure you’re aware of any impact of price volatility on your project.

Provisions for dealing with volatility should be included in your contract to help manage any risk and safeguard your future.

It’s through this collaboration and strong partnership that you can protect your construction company.

At Midland Structures, we have extensive experience in delivering high-quality steelwork to the construction industry. Working closely with our customers and developing strong relationships, we ensure your steelwork is delivered to budget.

If you’d like to know more about us as a company and the work we do, or you’re interested in getting a free no obligation quotation for your construction project, get in touch today on 01384 411201 or email us at info@midlandstructures.com.