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Raw Materials Prices Soar

26th April 2021

The cost of our raw materials, and specifically steel prices have continued to increase (as at March 2021) following a downward period during the peak of the lockdown.

This is a global trend which is not looking to slow down or reverse any time soon. 

Of all finished steel products across the globe, Hot Rolled Coil is predominant and is the foundation for many steel-based industrial goods. As China is the world’s largest producer, exporter and consumer of steel, it exerts a strong influence over global pricing. China produces more than half of the world’s steel and typically exports more each year than some countries produce. This makes Chinese steel prices the key indicator for regional markets and further.

However, towards the middle of 2020 China imported their highest levels of finished steel since 2009, largely due to substantial fiscal spending and monetary easing. Also, during this same period, China has been exporting far less – dropping to the lowest levels since 2013 – with China’s domestic market maintaining strong demand from its infrastructure and property sectors, this resulting in little room for steel exports from China to rebound. The price of Steel HRC FOB China has increased substantially since the middle of the year, with this trend likely to continue during Q2 of 2021.This is not exclusive to HRC as cold-rolled coil, plate, wire rod and rebar prices also continue to rise.

European prices have risen in line with Chinese prices with coil prices continuing to rise substantially in November; the MEPS Europe Average Hot Rolled Coil transaction value has climbed by more than 25% since June 2020. European steel distributors are largely confident they will be able to pass this price increase down the supply chain at the moment and for the foreseeable; due to lockdown and other reasons, stock levels remain low with end users accepting they will need to pay more to replenish.

Here are some reasons why we feel that European prices will continue to increase for the short term:

1.     Trade protection MEPS report as being another factor which will likely influence the near-term steel price, as the European Commission have implemented revised safeguard quotas aimed at preventing economic damage for European steel producers. This will ultimately result in reduced import into the EU from major suppliers such as Turkey, India and Russia.

2.     Rising costs as raw materials for steelmaking have increased drastically since late March. Iron ore prices have reached a six-and-a-half-year peak (as can be seen in the chart from Trading Economics).

3.     Unsustainable margins as European mills cannot withstand such weak financial positions. Mills need to lift spot market prices before 2021 negotiations begin.

4.     Uncompetitive imports, largely due to China importing such a large amount of raw materials and finished steel. More than in previous years. China’s stimulus fuelled recovery from the virus pandemic has enabled steel exporters such as Russia and China to increase HRC values by over $100 per tonne since the March/April crash.

5.     Tightening domestic supply due to a substantial amount of capacity having been taken out of the market; crude steel production in Europe fell more than 25% in Q2 when comparing to the previous year.

6.     Recovering demand as steel consumption increases throughout the rest 2021.

'Tis the season to be merry

16th December 2020

The New Year looks brighter

I am scripting this email on V day (V for vaccine). It is amazing news that the first vaccines are being issued and the roll-out of vaccination in the UK has started. A big round of applause to Maureen Keenan aged 90 who was the first person to receive the Pfizer vaccine. Hopefully this is the start of better things to come. 

2020 has been a very different year, but let's just focus on looking forward to a much better, more normal 2021. With our M1 ERP system keeping reasonably accurate records of stock transactions, we will not take time-out to do physical stock check before Christmas.

It is that festive time again so below you will find our factory times for the Christmas break:

Our last shipping day by FedEx or pallet carriers is Tuesday 22nd December and our last operating day is Thursday 24th December, however, we will close at 12 noon Thursday for the Christmas break.

Customers may pick up any outstanding work before 12 noon Christmas Eve Thursday 24th December.

The factory reopens on Monday 4th January 2021. There will be a full shipping service using FedEx or pallet carriers. We will still be running 4 long day week during the pandemic:

Monday to Wednesday 0700-1700
Thursday 07-00 to 16-30

The office will be open each Friday 07-30 to 16-30 with the sales team Dave, Ricky and Andy in attendance. 

Finally, I would like to take this chance to wish you all a Merry Christmas and a Happy New Year, and we look forward to catching up in the New Year.

In 2021 it will be nice travelling to visit customers, invite customers to our factory for a store tour, shake hands and not have to shout making yourself heard over 2 metres 

Stay safe and best regards to you and your family.

Post Lockdown - Cirrus remain open for business

1st November 2020

Following the government announcement yesterday. 

As predicted yesterday, Saturday 31st October, the government announced the country will enter it's second national lockdown from this Thursday 5th November for 4 weeks. It was also confirmed that certain industries will continue to operate. These are education, food retail, construction and manufacturing, which means we will continue to operate in the same manner throughout the months following the initial lockdown period.

We will maintain our 4 day shift pattern, which as previously described makes the factory more efficient and reduces the number of days our machine operators need to travel to the factory therefore limiting the days they need to be on the road.

The factory floor working hours will be:
Monday – Wednesday 07:00 – 17:00 (10 hour shifts)
Thursday 07:00 – 16:30 (9.5 hour shift)
Friday closed for manufacture (no operators) open via phones and email for collections and deliveries all day with Dave Connaway our MD in attendance.
Saturday, Sunday – factory closed but we are still contactable by email.

As a project update, we are currently working on some great new projects, the lockdown will naturally impact these due to decision making elements and material availability, however, this means we are now incredibly positive about 2021 when we get through this current uncertainty.