7 Apr 2016

Steel mesh hold could hit building costs

3:52 pm on 7 April 2016

Builders are warning costs could go up and the construction of houses may be delayed now a second big player, Steel & Tube, has put a hold on supplying its seismic reinforcing mesh.

A worker spreads ready-mix concrete over steel mesh (file)

A worker spreads ready-mix concrete over steel mesh (file) Photo: 123RF

The mesh has failed Commerce Commission strength tests prompting the company to temporarily stop supplying any more of the product. It has told building stores not to sell already in stock.

Building Industry Federation chief executive Bruce Kohn said he expected Steel & Tube to meet the costs of any delays to builders or sub-contractors because it was bound by warranties.

The test results received by the commission this week showed a Steel & Tube mesh sample did not meet the standard. The tests alone did not prove the mesh was non-compliant with the Building Code and the commission was seeking more information from the company.

Steel & Tube's voluntary move pre-empts the commission from ordering it to remove the product, as it did a major supplier, Euro Corp, when its seismic mesh failed the same vital stretching test a month ago.

But now that two of the country's top four suppliers are out of the market for a mesh that goes into every new house built on a concrete slab and into many multi-storey buildings, builders are warning of possible shortages.

Certified Builders Association chief executive Grant Florence will be alerting the organisation's 3000 builder members today.

"We will wait to see just what the manufacturers' response will be regarding possible shortages but just logic would suggest that there may well be a shortage looming," said Mr Florence.

"If it becomes severe then it would mean perhaps a delay in houses being built and may well also lead into potential price increases [for steel mesh]."

He will tell builders not to use any seismic mesh from Steel & Tube already on building sites, but it is unclear who will pay to bring in replacement mesh.

"That's a good point, and I think there's probably some conversations that building contractors will be having with their building supply merchants. They may well be asking for a replacement product."

Steel & Tube briefed big building chains yesterday after warning the Stock Exchange, saying supplies may be disrupted in the short term.

Fletcher Steel Distribution said it would ramp up mesh production if needed, and doubted there would be a shortage.

It is, however, a smaller supplier than either Steel & Tube or industry number one United Steel. And RNZ News is aware a Bunnings store in the Hutt Valley was already having trouble sourcing mesh from last month when Eurocorp and a smaller player, Brilliance Steel, were barred from the market.

Steel & Tube is now questioning the way tests are being done and standards interpreted.

In its statement to the Stock Exchange on the testing, chief executive Dave Taylor said that "despite the laboratories testing against the same standard, Steel & Tube has been surprised by the variability in the results, including results provided by the Commerce Commission, and has encountered significant ambiguity around the interpretation of the testing standards".

It is unclear how that fits with the firm's move announced yesterday to have all its mesh tested by an external laboratory, and not just in-house.

The Commerce Commission has not revealed by how much the firm's seismic mesh failed its test. A fortnight ago RNZ News obtained an accredited lab test that showed one such sheet was only half as strong as it should be.

"The commission's tests alone do not establish non-compliance", the organisation said in a statement.

"They show that the sheets of mesh tested failed the testing. There are a number of ways to meet that standard and information has been requested from Steel and Tube to substantiate their claims that the product does comply with the standard."

Consulting structural engineer Adam Thornton, of Dunning Thornton, said that engineers had been cautious about imported structural steel, but had not had the same attitude towards New Zealand-made products.

"A large portion of reinforcing is New Zealand made and ... I think our practice and many others would expect it to be okay," said Mr Thornton.

"We will certainly seeking more demonstration or clarification of what materials are actually being supplied. Long term, engineers are going to want to see greater clarification that the standards are being met."

Steel & Tube chief executive Dave Taylor said the company "will not accept anything less than absolute validation" that the product was up to standard.

Mr Taylor has turned down RNZ News' requests for an interview to spell how such validation will be achieved.

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