British Steel’s sudden decision to close the order book came out of the blue yesterday when letters were sent to stock holders and steelwork contractors.
This morning stunned customers were trying to assess the impact of the decision on their businesses.
One told the Enquirer: “We’re not sure what product lines are affected and how long this will last. It’s going to be a real headache for everybody because we are going to have to go to alternative suppliers and work out what stockholders have.
“It’s now a question of where you get your steel from and, of course, at what price.”
The letter headed ‘Notification of extreme demand and capacity contraints’ said: “Due to extreme high demand impacting on capacity levels, I am writing to inform you that British Steel is temporarily closing the order book, and therefore with immediate effect we are unable to accept any new orders for production.
“Please note that ex-stock sales are unaffected by this announcement, and that we shall continue to despatch materials already produced as normal.”
British Steel has been rumoured to be working 24/7 across all production machines in recent weeks and has been struggling to deliver orders on time for some customers.
The decision to stop taking new orders is unlikely to have an immediate impact on building projects because orders will have been placed months in advance. But it could bring disruption to smaller jobs and have an impact later this year.
The race will now be on to source future orders with alternative suppliers like Arcelor or other European producers that are understood to still have production capacity.
Another steelwork contractor told the Enquirer: “The problem now is stockholders prices will increase because they don’t know when or at what cost they can replenish stock again.
“After unplanned steel prices hikes throughout the last 12 months, we thought it couldn’t get any worse. It just has.”