ST. BRIEUX, Sask. – Bourgault Industries, like many farm equipment manufacturers, says its steel costs have increased sharply in the past year.
Robert Fagnou said the cost has to be passed on to farmers, but like most companies, Bourgault is attempting to find alternative processes and products to save money.
Claude Rouault of Highline Manufacturing in Vonda, Sask., echoed the point.
“It definitely affects the cost that we have to charge for equipment,” he said about the company’s costs to build forage handling machines and mowing equipment.
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“It’s not just the steel in the machines. It’s weld wire, fasteners, castings we need to have made and the energy prices we pay to build the equipment,” said the materials procurement specialist.
World prices for steel reached a record peak last week, according to the British industry watcher MEPS International.
From September of last year to prices paid last week, hot rolled steel in coils is up $600 per tonne in North America.
Analysts say the increased cost is because of reduced imports from Asia. Despite flagging industrial use in the United States and Eastern Canada, there is still a short-term shortage in the market.
While some relief may come in 2009 as industrialized nations’ economies falter, it will be limited because of reduced steel mill production in North America, said analysts.
