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Steel demand set to ramp up truck prices
Page 7
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ROCKETING STEEL prices fuelled by increased Chinese demand are forcing manufacturers of trucks, vans and bodies to raise their prices.
At the recent IAA commercial vehicle show in Hanover, Volvo and MAN both warned that prices would have to rise.
"We have to compete on the world stage and we will implement a 1.5% price increase from the beginning of next year," said Hakan Samuelsson, boss at MAN trucks in Germany.
According to steel industry figures,Chinese demand for steel has increased by 27% a year over the past five years. This rising requirement for steel, coupled with the increased economic activity in the US (which is in itself driving demand). has seen the price of steel plate rise from £240 a tonne in January to £340 a tonne in August: an increase of 42%.
Not surprisingly. UK steel tipper bodybuilders are feeling the pinch: "Pricing of steel is a major problem at present," says Scott Burton, sales director at Thompson Charlton. "We've been able to absorb the rising costs so far, but we've been informed of another price rise which will force us to put our prices up" That warning is echoed by Keith Bailey.
MD at tipper bodybuilder Trent Industries. "We've got to pass the price rises on, we've got no choice," he says.
"It's not only the raw steel which is increasing in price," Bailey explains. "We've also been hit by increased tipping gear costs and other steel components."
• Steel sector report, page 50.