T&T: Builders steel themselves to deal with steel shortage

Steel inventories are running low at most hardwares, as a global shortage begins to hit the local building sector.

Where steel is available, it is at drastically-inflated prices.

Hardware dealers said yesterday they had been turning away buyers in recent times, since they themselves were unable to get supplies from international markets.

Byron Gopaul, managing director of Gopaul Lands Hardware, said a tonne of steel on the world market was US$653, up from US$285 a tonne in 2002-2003.

He said the world price skyrocketed during December, and had been rising weekly since then.

He has started turning away customers since the steel mills abroad are refusing him supplies.

“The situation is grim... They’re all saying they’re sold out. Right now, the mills are refusing to accept any orders in France, Spain, Russia ... They’re all fully booked.”

Gopaul said he had been told he would get only 30 tonnes out of the 1,000 tonnes of steel he just requested through his London brokers.

“There’s gonna be a chain reaction in the price of BRC and steel rods and this is gonna increase construction costs,” he said.
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Only about five per cent of the steel consumed in the domestic market is supplied by Caribbean Ispat Ltd (CIL).

Maharaj said prolonged escalation in steel prices would spell disaster for the construction sector.

“It is really going to put building prices out of reach,” Maharaj said.

He said many projects had already got off the ground and it would be impossible at this time to shelve them.

“Where does that leave the builders?” Maharaj asked. “Because of the way in which the construction industry operates, when steel prices go up you can expect other building materials will be sure to follow.”

CIL, meanwhile, says the shortage was primarily due to China’s steel consumption rising by more than 25 per cent from 2002 to 2003.

“This has sucked away all steel availability,” a statement said.

CIL said the situation was exacerbated by China’s growing steel production, which had lead to an acute shortage of raw materials needed to produce steel like iron ore pellets and coke.