29 April 2004 | Andrew Golder
Purchasers at manufacturing companies are searching the globe for cheap steel to reduce overheads and stay in business.
China's growing industries are consuming much of the world's supplies of scrap and have forced steel prices up by 30 per cent since January.
Steel supplier Corus is raising steel prices in July for the third time this year.
A spokesman said the company was renegotiating its long-term contracts with customers to take into account the price rises.
"We are talking to those companies with which we have long-term contracts to ask if there is any way we can increase what we charge them."
Companies have been forced to stockpile raw materials and insist their contractors slash costs, as well as passing price hikes on to their customers
David Hall, purchasing manager at engineering component manufacturer Washington Components, said the company was now holding prices for customers for three weeks, compared with 30-60 days last year.
"We decided to put more raw material in stock and bought a range of different sizes because we were told the prices were going to increase."
But now, Hall said, steel mills would only sell companies the minimum amount of metal needed to cover orders.
He added: "Cost is the main driver for us to get steel. As long as it meets minimum standards, we'll have it.
"We don't care if it is Polish, Chinese or Italian - we are working round the clock scouring the globe for cheap steel."