Steel prices up, you pay more
Mar 10, 2004 12:20 PM
Perhaps you’ve noticed that the price of commodities has gone up in recent months. If you’re talking corn and beans, that’s good news for farmers. But if the commodity in question is steel, short-line equipment manufacturers in particular would like you to know that high steel prices are likely to increase the cost of your next planter, auger or wagon.
Steel mills throughout Canada and the U.S. announced price increases in January 2004 of $25 per ton, $55 in February and another $45 in March. Some steel companies are calling the increases “surcharges” and attribute the increase to soaring world demand for steel, especially in China.
North American manufacturers aren’t likely to just absorb the higher steel prices. But rather than simply raising product prices, equipment manufacturers associations say they are considering a recommendation that members pass on the price increase and the term “steel surcharge” directly to equipment customers. The idea is to clarify the reason for the increase. Which makes sense, though it is too bad that farmers can’t pass things like tech fees and steel surcharges directly on to grain buyers and consumers.
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