July 25, 2008

Turkish steel association suggest construction steel price index

The Anatolia news agency reported that Turkish Steel & Iron Producers Association has suggested separate index for contracts in which steel iron products are heavily used in order to not cause project delays.

Mr Veysel Yayan secretary general of Turkish Steel & Iron Producers Association said that contractors, the Housing Development Administration of Turkey and the Ministry of Settlement and Public Works should use another index for steel products because prices have increased by 40%since the beginning of the year.

Mr Yayan said there was a scarcity of raw material all across the world leading to the price of scrap metal to rise. He said Turkey has also been affected by this rise and that costs have gone up. However, he added that increasing costs had not been reflected in prices yet.

Emphasizing that forecasting the situation for the next two months is not possible, Mr Yayan said that even long term contracts based on the consumer price index and the producer price index were very risky. He said they had warned TOKİ and the Public Works Ministry, which make these kinds of long term contracts, about the risks of long-term forecasts. He said that “The contractors would not say whether they benefit from this or not, but if they suffer a loss, they will request compensation from the government,” he said, adding that administrators should set a new index for steel and iron.

Mr Yayan suggested a separate index for contracts in which steel iron products are heavily used in order to not cause project delays.