Local companies are trying to gouge. The local steel cost is double or triple versus importing. It's better to wait out the logistics issues and hold extra stocks where you can, rather than be shafted. Steel prices ex China are up again from 1 May.
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Steely resolve is required
I am in the construction industry...it is not just the suppliers gouging....it is rife with kick-backs and absolute short-term thinking. Unfortunately all of this is driving inferior construction choices - I am watching one house go up with much much cheaper non-steel roofing, if it leaks it will be after year 5, well after those responsible for the construction and sale have moved on. My steel roofing costs for a medium density development has not changed from pre-COVID *circa 550m2 of roofing plus overs).
I take a different view as that approach is part of why STU got into the s*** before. I think shareholders would rather a more stable business rather than gouging customers whenever they could. Why, this spins into dividend stability and reduces perceived risk by the market hence better multiples. But hey what would I know.
Thanks BeeBop, sort of what I have heard. I hope STU directors/mgmt are reading this. I will certainly be asking these questions at the AGM and sooner. If this company is going to go forward it had better be prepared to tell shareholders how it is approaching this issue.
As to the kick-backs 'aka rebates', a 1085 GFA development (half of which has a complex roof design, the other half is simple) has been charged 47k for steel roofing where the supplier was carefully selected to avoid 'rebates'. Another development with a GFA of 580 using a well known supplier (not STU) is also paying 47k for a standard steel roof design. The costs are in the entire ticket clip from consultants owning/trading their 'clients', through to rebates and the final government ticket clipping.
Hi BeeBop, that sounds like interesting stuff, but please explain more, - what is GFA? and please explain hw these rebates work?
Cheers