Steel materials prices surge as impact of Ukraine war bites

The prices of steel building products surged in March due to the impact of the war in Ukraine and ongoing energy price volatility. Building’s updated Trends and Prices Data Dashboard shows the Office for National Statistics price indices for concrete re-enforcing steel bars increased 31.6% in March compared to February. Fabricated structural steel also shot up in March, rising 19.2% month-on-month. Simon Rawlinson, head of strategic research and insight at Arcadis, said increases were “largely explained” by the Ukraine war and the subsequent disruption to energy markets. He added: “Furthermore the loss of access to Russian and Ukrainian raw material and semi-finished product markets will have deprived manufacturers of access to long-term stable supply chains and price agreements. “Over and above the issue of very high prices, the other issue for the industry is the lack of price certainty that contractors can access through the materials supply chain, which is increasing risk for both clients and contractors.” A spokesperson for the Construction Products Association said steel products are more directly affected by the Ukraine war than other products as 13% of UK imports of steel construction materials come from Russia and Ukraine, compared to 1.2% of all UK products. He said: “Steel-related products are commodities so the spikes in iron ore and steel prices will have also affected steel products. “Plus, steel construction materials are energy-intensive and energy costs account for between 25% and 33% of total costs for energy-intensive manufacturers so the recent sharp energy cost rises also contribute to the sharp price rises.” The surge in March significantly accelerates an existing trend for rising steel material prices, with concrete re-enforcing steel bars and fabricated structural steel increasing 63.6% and 54.7% respectively in the 12 months to 31 March, the highest of any building material.