Steel price hike affects cost of fencing on farms

Fencing contractor Willie Lake, of Lake Contracting, Omakau, expects predicted price increases for wiring will affect the amount of work available to contractors. Photo / Yvonne O'Hara

It is not looking pretty for fencing prices, Fencing Contractors Association New Zealand board member Shane Beets says.

In fact, he called the situation a "perfect storm".

He expected fencing contractors and ultimately farmers were going to have to pay significantly higher prices for steel fencing supplies and other steel products during the coming year.

After talking to New Zealand wire suppliers and other contacts in the industry, he believed up to a 40 per cent increase in prices for wire products was likely.

"It is a scary situation. It is going to cost rural New Zealand a lot of money to get stuff done."

Factors affecting the price include an increased demand from China for Australian iron ore.

"China is doing some serious infrastructure building, which has been going on for some time, and it is driving the price up for iron ore, scrap steel and recycled steel both out of Australia and globally.

"There was a similar situation in the lead-up to the Beijing Olympics, when China was building infrastructure for that."

The Ministry for the Environment released its Essential Freshwater document in September last year, which required an additional 32,000km of waterways to be fenced to exclude stock.

That will need to be completed by 2025.

"It is a perfect storm," Beet, a fencing contractor from Wellsford, said.

"The increased demand was removing steel from the markets and driving prices up."

On top of that, shipping agencies are reporting freight transport delays, which will affect product availability.

Willie Lake, of Lake Contracting, Omakau, has been in business for nearly 20 years.

He said the expected price increases would mean it would cost more to do the job, which affected farmers and the amount of work available to contractors.

"They will pick and choose what they want to do. It also means most farmers probably want to look at doing the bare minimum, and only what is needed at the time."