Rising steel prices are impacting farm buildings, machinery, and equipment and McAree Engineering, Ballinode, in Co. Monaghan is among those feeling the pinch.
The company manufacture and supply the award-winning V-Mac range of animal feed silos to livestock farmers and pig and poultry producers in Britain and Ireland.
Peter Richardson, marketing manager with McAree Engineering, Ballinode, Co. Monaghan:
“We are seeing a £450/t increase in the cost of steel for quarter 2 compared to quarter 1.”
“This is an increase of up to 45% and brings the cost of mild steel towards €1,700/t. This is largely as a result of the war in Ukraine and also due to the huge increase in natural gas prices.”
Indeed, over the course of 2021, the wholesale price of European natural gas jumped by over 400%, setting new records.
Furthermore, the costs of producing steel are at an “all-time high” as Russia and the Ukraine supply a large portion of the raw materials (Iron Ore and coke, which fuels the furnaces).
In addition, to Russia being a large exporter of steel in its own right, the importation of it into Europe is now “severely” restricted.
Other inputs into steel-like Nickel, utilised to make aluminium, galvanized and other ‘coated’ steels, are at prices that people have “never seen before”.
The increase in energy costs and gas, in particular, are also having a “major” impact on steel production.
As a result, steel mills are having to shut production down during peak energy usage times, which is impacting production by up to 10%.
This is leading to “a perfect storm” with high input costs and curtailed production.
Steel was already at an all-time high, and it was only £450 a tonne two years ago.
It broke the £1,000 mark at the end of 2021. Meanwhile, it has continued to “accelerate” in price since the start of the Ukrainian War.
Along with these high prices, McAree Engineering has been advised that there will be shortages in supply.
In particular, special steels like stainless, aluminium, and galvanised along with structural steels will be “heavily affected”.
Therefore, McAree Engineering stated that it has “no option” but to apply a steel surcharge to all existing orders for its V-Mac Silos.
This surcharge will be in the region of a 20% increase on current prices.
In a statement, a spokesperson said:
“McAree very much regrets the need to impose this surcharge. Hopefully, energy and steel prices may reduce later in the year once the conflict in Ukraine is resolved.