Rising commodity prices a pain to manufacturers

Oil is getting all the attention, but manufacturers have been hit hard with sharp pricing increases for a host of essential commodities in 2004. Copper has risen 72% since 2003, to $1.39/lb., according to a report in the Globe and Mail. The price of nickel, aluminum and zinc has risen 52%, 26% and 23%, respectively. The price of hot-rolled steel has triple in the past year. According to a Statscan report cited in the article, more manufacturers of primary metals, fabricated metal products and machinery expressed concern about steel shortages, higher prices, and increasing exports of scrap metal to China. The bull market for commodities has also directly fueled a 24% increase in the value of the loonie since 2003. A higher dollar makes Canadian manufactured goods more expensive for customers in export markets, but also makes it cheaper for manufacturers to buy raw materials.