Posted on February, 28, 2025 at 05:06 pm
Steel and aluminum tariff adjustments recently introduced by the Trump administration are expected to test the mettle of US manufacturers that rely on steady prices and supplies to build the products that serve the grain handling and storage industry.
Those companies were well represented at the Grain Elevator & Processing Society (GEAPS) Exchange recently completed in Kansas City, Missouri, US, where hundreds of manufacturers gathered to share their latest products and innovations. Steel and aluminum tariffs weighed on their outlook, but companies said costs are necessarily a daily conversation within their businesses and with customers.
Sioux Steel, based in Sioux Falls, South Dakota, US, was highlighting its latest grain storage and handling equipment, including sweeps and bins at the GEAPS Exchange. Commercial and farm demand has been steady, said Max Rysdon, sales engineer, and that has allowed the company to get ahead somewhat of price concerns.
“In the immediate future, I don’t see a tremendous impact, as most suppliers have their contract pricing locked in for steel,” Rysdon said. “Sioux Steel has got up to 85% of our capacity locked in for the next year at prices that were pre-2025. However, as you’re looking forward to projects that extend beyond that eight-month timeline (into next year), you could start to see those (tariffs) have an effect.”
Tariffs announced
On Feb. 10, President Donald Trump signed two proclamations revising previous proclamations related to steel, aluminum, and derivative steel and aluminum products issued during his first administration that are to take effect March 12.
One reinstates 25% tariffs on all steel imports and introduces steel derivatives duties, and the other increases tariffs on aluminum products from 10% to 25%. These proclamations also eliminated previous exemptions in place since 2018 by the Trump and Biden administrations providing relief to Argentina, Australia, Brazil, Canada, EU countries, Japan, Mexico, South Korea, Ukraine and the United Kingdom.
The United States depends on imports for about half of its aluminum supply and even more for special aluminum products. Roughly two-thirds of primary aluminum comes from Canada, according to the Aluminum Association, where lower energy costs make it cheaper to produce.
Relying less on steel imports, US steel mills churn out about three-quarters of what is needed to meet domestic demand. Many industries, including construction, still depend on foreign sources for specific types of steel, such as steel pipes and tubes, which can withstand extreme temperatures and pressures.
Canada stands to take the biggest hit as the United States’ top supplier of imported aluminum and steel. Canada supplies over half the US aluminum product imports. As the United States’ two most important free trade partners, Canada and Mexico likely will seek exemptions. Some companies and other governments also will seek to negotiate exemptions for their products to mitigate the impact.
Industry reaction
Still, equipment manufacturers during the GEAPS Exchange said they remain nimble in the face of the uncertainty and are keeping dialogue open with their own suppliers and customers about the potential impact of tariffs on pricing.
Essmueller, a bulk handling equipment company based in Laurel, Mississippi, US, was showcasing some of its large equipment at GEAPS Exchange, including an elevator boot and head with a capacity of 100,000 bph, which highlighted just how much steel and aluminum are necessary to their manufacturing process.
As for prices, Jamison Anding, executive vice president of Essmueller, said the company hasn’t felt the impact yet, but expects that to change as the tariffs take effect in March. Essmueller uses only US-produced steel and is in constant contact with its vendors and customers, he said. If projects are ready to go, customers are encouraged to order the equipment so steel can be locked in at current prices.
“There will be a price increase,” Anding said. “We know it’s coming. We’ve been trying to make sure our customers know that as quick as we know something (about prices), we’ll keep them in the loop.”
A global manufacturing footprint could help AGI weather trade and price disruptions related to steel and aluminum, said Mike Hand, vice president, Americas commercial. The implications are a daily conversation for the Winnipeg, Manitoba, Canada-based agricultural equipment maker with facilities in Canada, the United States, Brazil, India, France and Italy.
“That diversification is giving us, we think, some options to be able to maybe balance some things to serve all the markets, even if not necessarily the current way in which we do that,” Hand said. “We may have to pivot and shift, but that’s something that we’re really looking at.”
He said steel and aluminum supplies aren’t a problem, but where prices land is another conversation in which the company’s dealers and customers are all engaging.
“Everybody’s participating because it really is going to affect all of us, and even without, say, a specific tariff or a country change, we are seeing input prices rise in general for everybody,” Hand said. “In the last couple of months there’s been a lot more uncertainty in the market, and no one likes that in a business environment. We haven’t really set on any conclusions yet because things are pretty dynamic.”
Randy Coffee is vice president of sales and marketing for Superior Grain Equipment, a supplier of grain storage, handling and conditioning equipment and accessories in the United States and Canada. He said the company, based in Kindred, North Dakota, US, expects to see at least some impact, and Superior has seen good demand this year from commercial customers.
“Every company that is a bin manufacturing business, there’s going to be some sort of price adjustment in March,” Coffee said. “We’ve got a good management team that monitors the market well, and we try to be as aggressive as possible (purchasing ahead), and so far, it’s worked out well.”
Mark Kjar, president and general manager of Chief Agri, said that, while supply is solid, prices already are having an impact on the Kearney, Nebraska, US-based maker of grain storage, handling and conditioning equipment.
“As we’ve always done, we buy the best that we can,” Kjar said. “We evaluate all purchasing methods and react accordingly. Hopefully, it’s just a (price) spike in the market. The challenge becomes that the trend downward is never as quick as the trend up, and it never goes as low as it started.”
Grain equipment and storage demand remains resilient, he noted.
“The industry as a whole has been strong,” he said. “Grain prices are recovering, so that'll be very impactful and help us all.”
Source: World Grain