McAree Engineering based at Ballinode, in Co. Monaghan manufacture and supply the award-winning V-Mac range of animal feed silos to livestock farmers, pig and poultry producers in Britain and Ireland.
According to Peter Richardson, Marketing Manager with McAree Engineering, Ballinode, Co. Monaghan “We are seeing a £450/t increase in the cost of steel for quarter 2 compared to quarter 1. This is an increase of up to 45% and brings the cost of mild steel towards €1700 per ton. This is largely as a result of the war in Ukraine and also due to the huge increase in natural gas prices.
Indeed over the course of 2021 the wholesale price of European natural gas increased by over 400% setting new records. The costs of producing steel are at an all-time high as Russia and the Ukraine supply a large portion of the raw materials (Iron Ore and coke which fuels the furnaces) in addition to Russia being a large exporter of steel in its own right, the importation of it into Europe is now severely restricted.
Other inputs into steel like Nickel which is used to make aluminium, galvanized and other “coated” steels is at prices never seen before. The increase in energy costs and gas in particular is also having a major impact on steel production to the extent that some Steel Mills are having to shut production down during peak energy usage times which is affecting production by up to 10%.
This is leading to a perfect storm with high input costs and curtailed production. Steel was already at all-time high, (Only two years ago steel was at £450 a ton) it breached the £1000 at the end of last year and has continued to increase and accelerate in price since the start of the war Ukrainian War.
Along with these high prices McAree Engineering have been advised that there will be shortages in supply and in particular special steels like Stainless, Aluminium, and Galvanised along with structural steels will be heavily affected. So McAree Engineering have no option but to apply a steel surcharge to all existing orders for their market leading V-Mac Silos. This surcharge will be the region of a 20% increase on current prices.
McAree very much regret the need to impose this surcharge but hopefully energy and steel prices may reduce later in the year once the conflict in the Ukraine is resolved. For more information please contact McAree Engineering office: Tel: + 353 (0)47 79000 or Peter Richardson, Sales & Marketing Manager. Tel: (+ 353 (0) 872584584) or Email: email@example.com Also their websites at https://www.vmacsilos.ie/