Newsletter 36- Steel Prices/Corus Announcements

27th January 2009

Recently it has been widely reported in the press that Corus are making 3500 employees redundant due to the sudden and unexpected fall in demand and the collapse of steel prices which have been reduced by 50%. This statement has, quite rightly, caused a lot of concern from many of our customers who have not experienced a recent halving of prices. However this statement re prices is very misleading and please find below accurate facts relating to price levels as they are now. (All these figures are supplied on our website and are updated monthly).          

(January 06 = 100 Units)

Heavy Sections (Beams/Columns etc) Jan 08 = 157 units

                                                             Aug 08 = 212 units

                                                             Dec 08 = 174 units

(A reduction of 18% from August to December)

Merchant Bar (Angles/Flats etc)          Jan 08 = 124 units

                                                             Jul 08 = 215 units

                                                             Dec 08 = 134 units

(A reduction of 38% July to December)

Hollow Sections (Tubes etc)                Jan  08 = 117 units

                                                              Aug 08 = 205 units

                                                              Dec 08 = 154 units

(A reduction of 25% August to December)

Prices have therefore not fallen overnight but since September and you are benefiting from these current price reductions.

Future Prices

Predicting future prices with the current economic climate is very hazardous. We expect heavy section prices to weaken still further despite the steel mills reducing production levels by up to 40%. Hollow section prices have fallen again in January and are now at 140 units, a reduction from their peak of 35%. On the other hand merchant bar prices have risen by £55/t since December, tracking the increase in scrap prices.

There is a lot of steel imported into the UK from Europe and the rest of the world so the weakening of the £ against the $ and Euro has kept imported prices higher than normal. How deep will the recession be? How long will it last? These factors will dictate future price levels.

Whatever happens over the coming months we will reflect these movements in our charge out prices and you will be able to check price levels on a monthly basis by visiting our website.

I hope this clarifies the current position re steel prices and if you require any further information please give us a call on 01423 867333, we are here to help.

Thank you for reading this and if you have any comments about Tomrods Ltd or our website please email the undersigned at johnt@tomrods.co.uk

John Thompson
Managing Director -