Steel prices push up machinery costs

The price of steel has increased 40 per cent in six months, and is making fencing and farm machinery significantly more expensive.

Demand from China and India is pushing up the cost of iron ore, with prices expected to rise further.

Equipment manufacturer Les Gason says during the Beijing Olympics, the Chinese will turn off steel production plants to improve air quality.

"My understanding is that it's worldwide, the price of steel worldwide has gone up," he said.

"That means that anything that's made out of steel that the price is increasing around the same percentage.

"That's because the price of iron ore went up, coking fuel's gone up, so the cost of manufacturing of steel has gone up enormously in the last five months."