How Rising Steel and Aluminium Costs are Affecting UK Manufacturers

Tadweld’s latest purchasing data shows significant increases across key materials, adding pressure to manufacturers already navigating fixed-price contracts, narrow margins and competition from imported fabricated products

Material costs are creating fresh pressure for UK manufacturers

Manufacturers across the UK are facing renewed pressure as the cost of essential raw materials continues to rise.

For businesses that fabricate steel and aluminium into finished products, these increases are not confined to the purchasing department. They can affect project pricing, margins, investment decisions and the long-term competitiveness of British manufacturing.

Recent changes to steel trade measures have added another layer of complexity. Revised measures introduced on 1 July 2026 reduced tariff-free import quotas and applied a 50% tariff to eligible steel imports above those limits.

Although supporting domestic steel production is a positive objective, manufacturers further down the supply chain risk being caught in the middle.

What Tadweld’s purchasing data shows

To understand the scale of the pressure, we compared our actual purchasing costs over the past three months with our average costs across the previous 12 months.

The results show increases across every material category examined:

Material	Last three months	12-month average	Change
Mild steel sheets	£1115/tonne	£1078/tonne	+3.46%
Mild steel sections	£1369/tonne	£1100/tonne	+24.51%
Stainless steel sheets	£2680/tonne	£2546/tonne	+5.24%
Stainless steel sections	£3026/tonne	£2822/tonne	+7.22%
Aluminium sheets	£4058/tonne	£3522/tonne	+15.22%
Aluminium sections	£6250/tonne	£4785/tonne	+30.63%

Source: Tadweld purchasing data. Costs and product mix vary according to purchasing volumes and individual requirements. 

These figures represent prices Tadweld has paid, rather than theoretical market estimates. While our purchasing volumes and product mix will differ from those of other businesses, the data offers a real-world illustration of the pressure facing manufacturers.

The impact extends beyond raw steel

Mild steel sections have increased by 24.51% in our comparison. This is particularly significant because sections are a major input for products such as:

• Mezzanine floors
• Staircases
• Warehouse structures
• General structural steelwork

Aluminium sections recorded the largest increase, at 30.63%, while aluminium sheets rose by 15.22%. These materials are commonly used for Durbar flooring, decking and lightweight fabrications.

Stainless steel experienced more moderate, but still meaningful increases. It is an important material for hoppers, workbenches, handrails and hygienic fabricated structures.

Not every increase has the same cause. Steel is particularly exposed to changes in trade policy and energy costs, while aluminium prices are influenced by different supply, geopolitical and demand factors.

For a manufacturer, however, the commercial outcome is often similar: absorb the cost, accept a lower margin or increase the selling price.

Why downstream manufacturers are caught in the middle

Steel fabricators occupy a difficult position between raw-material suppliers and end customers.

UK businesses may pay more for raw structural steel while still competing against imported finished or fabricated products whose manufacturers have not faced the same cost increase.

This is sometimes described as the fabricated product loophole.

The concern is that trade measures designed to protect domestic steel production may unintentionally disadvantage the British businesses that purchase steel and turn it into finished products.

As Tadweld Managing Director Chris Houston explains:

“Whilst supporting UK steel production is a positive objective, we also need to consider the thousands of manufacturers who buy that steel, fabricate it and supply projects across construction, engineering and infrastructure.

“Our concern is that UK businesses are paying more for the raw materials they need while competing against imported fabricated products that haven’t faced the same cost pressures.”

What could a material increase mean for a project?

The impact becomes clearer when applied to a steel-intensive project such as a warehouse mezzanine.

A mezzanine’s overall cost includes raw steel, engineering, fabrication labour, transport and installation. When steel represents a substantial share of that cost, a material-price increase can significantly affect the project budget.

For example:

• If steel represents 50% of a project’s selling price and its cost rises by 20%, the direct increase would equal approximately 10% of the original selling price.
• If steel represents 70% of the cost base, the same increase would equal approximately 14% of the original cost base.

These scenarios are illustrative rather than forecasts. They do not account for possible changes to labour, transport, energy, financing or margins.

They do demonstrate why businesses delivering steel-intensive projects are particularly exposed to sudden material movements.

Fixed-price contracts increase the risk

The position becomes especially challenging when a manufacturer has already agreed a fixed price with its customer.

If material costs increase before the steel is purchased, there may be little opportunity to recover the difference. The manufacturer is then left with three broad options:

1. Absorb the additional cost and accept a lower margin.
2. Ask the customer to accept a higher price.
3. Reconsider whether the project remains commercially viable.

Additional costs may also travel through the supply chain. A fabricator may pass part of an increase to a main contractor, which may then include it in the cost of a warehouse extension, factory development or infrastructure scheme.

The developer or occupier ultimately faces a higher capital cost.

Supporting the whole British manufacturing supply chain

A strong domestic steel industry matters, but it forms only one part of a much larger manufacturing economy.

Trade policy must also consider the downstream businesses that fabricate, weld and engineer raw steel into products used throughout construction, manufacturing and infrastructure.

As Chris Houston concludes:

“If the objective is to support British manufacturing, we need to look at the whole chain. There is little benefit in protecting one part of the manufacturing economy if the unintended consequence is to make it harder for businesses further down the chain to compete.”

The figures in this article should not be interpreted as a forecast of future prices. Individual manufacturers will experience different movements according to their purchasing patterns, volumes and specifications.

They do, however, show why material volatility and its effect on downstream manufacturers deserve closer attention.

Planning a steelwork or fabrication project?

Early conversations can help identify the effects of changing material costs, specifications and project requirements. Contact Tadweld to discuss your project with our team.