Focus

In March, NRCA issued a Special Report warning its members about expected price increases in steel-related products, as well as copper. The price increases are in response to increased global demand and a weak U.S. dollar.

The Special Report states: "These price increases are attributable to several factors. First, there is increased global demand for steel products. China, especially, is buying more prime steel and scrap steel. Second, the weak U.S. dollar makes U.S.-produced steel more attractive to foreign buyers. And third, steel companies are facing rapidly increasing costs, especially for transportation and energy. The same kind of price pressures applies to aluminum and copper."

For example, and perhaps as a result of such price pressures, Butler Manufacturing Co., Kansas City, Mo., a major provider of building systems and architectural aluminum systems and components, has announced it will be acquired by BlueScope Steel, Melbourne, Australia, the largest steel producer in Australia and New Zealand. The Australian company produces steel slab, hot and cold rolled coil, plate, tin plate, and metallic painted and coated steel products.

BlueScope Steel is paying nearly $204 million for Butler Manufacturing ($22.50 per share for 6.4 million common shares and a debt assumption of $60 million). Pending shareholder and regulatory approval, the acquisition should be completed by May.

According to the Special Report, steel prices already have increased 30 percent during the past few months, and there are expectations for an additional 20 percent increase.

The Special Report also warns contractors to expect cost increases related to shipping and transportation of materials as a result of changes by the U.S. Department of Transportation (see "Driving by new rules," February issue, page 20) and increases in insurance premiums.

Roofing contractors can protect themselves by considering including language in contracts and proposals that addresses unforeseen or unusual price increases not contemplated in a bid. The Special Report includes sample contract language contractors can use.

Click here to access the Special Report in the Members Only section of NRCA's Web site, www.nrca.net.

Ambika Puniani is editor of Professional Roofing magazine and NRCA's director of communications.