The surge in the price of steel is set to lead to a 2% increase in the cost of construction projects by the end of the year, according to data from the British Constructional Steelwork Association.
The association said the trigger for the increase in the price of the product was sharply rising demand in China.

The price of "section steel" from steel mills has risen 50% and this is expected to lead to a rise of 20-25% for the finished steel frame, assuming that other costs such as transport remain constant.

When this is included in the total mix of materials used on site, the rising cost of steel is expected to lead to a 2% price rise overall.

However, BCSA director-general Derek Tordoff said that the price rises would slow towards the end of the year.

He said: "The second half of the year is not projected to be as dramatic as the first half. The increase of £60 a tonne in the first quarter should slow to a £30-a-tonne quarterly increase by the second half of the year."

Tordoff said the rise in the price of steel was a hiccup rather than something that would become a trend. He said demand had momentarily outstripped supply but steps had now been taken to increase the amount of iron ore being mined.

Tordoff added that the price of rebar (scrap steel used in reinforced concrete) had increased in the first three months of this year by 50%.