Surge in steel price may cost jobs, says ISME

The business organisation ISME has expressed concern on the "dramatic" increase in steel prices, which they feel are seriously impacting the construction and metal fabrication industries, possibly leading to closures and job losses.

The ISME says that since the start of the year steel prices have jumped by 20% on average, with further increases expected over the coming weeks.

"An increase of this magnitude to an essential raw material is going to negatively impact on the price of the finished product and will have an inflationary impact.

"The problem is compounded for some companies, who are tied in to fixed-term contracts, resulting in companies participating in projects at a significant loss," the organisation said.

"This uncertainty in steel price quotes is creating huge difficulties in planning for businesses and is putting the financial position of many companies on a knife edge, threatening the viability of the business and, in the process, putting jobs at risk," it added.

The ISME maintains that the volatility of the steel market is due mainly to the voracious demand for steel worldwide, especially in China, thus leaving a shortage of steel for the demands of the rest of the world.

The organisation today called on the Government, in its role as President of the EU, to demand that China cease its embargo on coke and steel exports in line with its agreements within the World Trade Organisation (WTO), in order to increase the worldwide supply of raw materials and thereby lead to a reduction and stabilisation in the price.

The ISME warned that the cost of other products, such as iron ore and some alloys, have also surged up, bringing production costs higher also.