Rebar Prices Soar
BIRFA, the British Independent Reinforcement Fabricators Association, is expecting prices for reinforcing steel to continue to increase through 2018. Although forecast UK demand for construction products in 2018 is relatively poor compared to recent years, cost pressures on steelmaking raw materials and consumables continue to mount, driven by consumption in other sectors and regions.
Since Chinese reinforcing steel was excluded from the UK market, reinforcing steel supply has been entirely sourced from electric arc furnaces remelting scrap. Even though the UK is a nett exporter of scrap the impact of rising international prices cannot be avoided here.
The price of graphite electrodes is a further concern. Pressure on needle coke supplies, reduced electrode manufacturing capacity and strong demand for electrodes are compounding and driving prices sharply upwards. The cost of electrodes was a very small factor in overall steelmaking costs 18 months ago, but is now of far more concern.
Steel mills have already issued letters warning of significant price increases to be implemented through 2018. BIRFA believes that it is important for the construction industry to take these warnings on board, and factor them into their forward costings. Reinforcing steel stocks at the ports are not high, and forward orders with overseas mills are largely pre-sold. It is thus likely that further price increases will impact the market very quickly.