Over the last few months we have been asked by the industry the effect both Brexit and Covid19 may have on the costs of materials and shipping in the short and medium term for both secured and future projects.
Up until December there have only been the standard yearly (December & January) reviews which is the norm within our industry. They only exception to this has been copper tube which priced monthly has risen dramatically over the last quarter of FY20. Copper tube production is heavily dependent on the cost of raw material and can be tracked on the London Metal Exchange.
We have now started to see some unprecedented changes for those products that have a high steel content such as carbon steel tube which is expected to increase significantly in the first quarter of 2021.
One of the reasons for this significant increase are the costs of transportation from outside of both the UK and EU as demand for materials start to increase following the previous 11 months of subdued trade.
This will have a significant impact on the costs of both imported finished materials and the raw materials required within the manufacturing process in the EU and UK. The effects will be felt by all suppliers within the chain that BMTFA members operate in.
In addition, although a trade free deal has been agreed by the UK and EU, there are also additional costs within the logistics chain from Europe to the UK caused by the new processes of checks on goods at the UK borders.
Both the factors conclude that there is a potential for significant cost increases which will begin to affect the price that will be seen at the purchase point in around March 2021.
Whilst at this stage we are unable to advise you of each product line that could be affected, we will endeavour to keep you informed as we gain more concrete information as the situation develops.
This communication has been produced for the purpose of informing members of the Association about speculative price changes and should not be relied upon as the sole basis of any business decision by those members or other business entity.