Despite the collapse in steel prices specialist contractors in the finishes and interiors sector are bracing themselves for significant rises in the cost of metal components used in ceilings, drylining, partitioning and SFS.
During recent weeks suppliers and manufacturers have been advising contractors that metal prices will be going up and that quotations may need to be revised. Suppliers have said a number of factors are currently influencing the price of steel globally and steel coil suppliers have warned of substantial price increases, leading to component prices rising by up to 25 per cent in the second half of 2016.
David Frise, chief executive at FIS, said: “A combination of significant price rises, difficulty in negotiating longer-term agreements and a reduction in the amount of steel exported from China are identified as the prime causes by manufacturers. This may also lead to longer lead times for procurement. Members are advised to check tender quotes and be aware of additional costs.”
Ann Fisher, global procurement category director – boards and ceilings, at SIG, said: “We’ve worked very hard to maintain price stability in a market sector that is still under pressure. If the market dynamics force metal component prices to change, we need to understand, and substantiate to the market clearly, the facts and the evolution of price changes to demonstrate why they’ve changed so that we can work with our supply chain partners to plan changes in the most effective way for supply of contracts.”
Angela Mansell, operations director at Manchester-based Mansell Finishes, said: “Price increases are a real risk for subcontractors to manage and specialists could catch a cold if they’ve been signing up to jobs now and fixing their price for 12 months. My advice would be to say no to fixed price.”
“These price increases will have a definite knock-on effect on subcontractors’ profit margins, especially if they are working on longer-term projects and don’t have the ability to rationalise the price increases,” commented Tom McLoughlin, chief executive at MACS Plasterboard. “Subcontractors will have to determine whether they pass on the price increase to main contractors.”
Business leaders say main contractors should get orders placed quickly to secure greater certainty of over costs.