Cost of Reinforcement (Steel) Goes Up
February 2016 was a month when foreign exchange rates were extremely erratic and our expectation when conducting our quarterly building materials price survey, was that prices would spike.
To our surprise, prices remained stagnant compared to our November 2015 Survey and in some cases, fell spectacularly.
The price movement of steel bars (popularly called reinforcement) was the most striking.
Local steel prices fell by about 10% (see box) and imported steel prices fell from N168,000/ton to N127,000/ton.
In a time of depreciating exchange rate, this was unprecedented, until the global slump of steel prices is factored into the analysis.
Well, the good times appear to be over as our current price survey of Building materials shows that reinforcement prices have started rising.
In the case of Local steel, prices have appreciated above the November 2015 prices.
Imported steel has also seen some price increase but it still has some way to go before reaches the November 2015 peaks.
What the results of the latest Price Survey seems to imply is that the imported steel prices act as a dampener on the local steel prices .
It is only when the imported steel prices rise that the local steel prices can move as well.
Developers and builders will therefore be praying for the continued glut in the foreign steel market.
Watch out next week for our quarterly Building Materials Price Index