Material Impacts On The Precision Machining Industry - Feb. 2008

Despite locally soft demand, ongoing price increases here in North America are the result of increased consumption of copper, steel, stainless steel and aluminum per capita globally. Price increases in cold finished steel bars have been announced for April, and higher surcharges are forecast for stainless steel in March.  Click here to read the complete Materials Impact Report (PDF format): Materials Impacts On The Precision Machining Industry - Feb 2008

Consolidation Continues as Prices Rise

Executive Summary
There comes a point where rising prices for raw materials raises the prices of the machined products made from those materials, thus encouraging the importation of foreign produced finished products. We are beginning to think that the weak dollar is our only defense…
Republic Engineered Products has announced a $35 dollar per ton price increase for carbon and alloy cold finished steel bars for April. Laurel Steel has announced it will follow. This is in addition to all surcharges in effect.

Technical member Bolton Metal Products Co. announced that it was closing its brass rod division, and selling certain assets to technical member Chase Brass & Copper Co., Inc.. Chase is a subsidiary of Global Brass & Copper, an affiliate of KPS Capital Partners, LP, who purchased Chase from Olin Corporation last November.

Increased consumption of copper, steel, stainless steel and aluminum per capita GLOBALLY seems to be the explanation for ongoing price increases here in North America, despite locally soft demand. Higher price per pound for most metallic materials are just a container voyage away in today’s increasingly globalized market, thus keeping prices in North America above what apparent demand would indicate.

Steel inventories at metals service centers in the United States and Canada closed 2007 up slightly from November levels as year-over-year shipments in both countries fell 4.1% from those of December 2006, the Metals Activity Report from the Metals Service Center Institute shows. U.S. steel inventories at the end of the year were up 1%, to 12.26 million tons, from November’s month-end supply. Although shipments were below year-ago levels again in December, it appears that the liquidation phase of the inventory cycle may have come to end. Service center inventories of steel and aluminum in the United States and Canada all increased in December. For the U.S. steel segment, this is the first increase since the October 2006 inventory peak of 16.8 million tons.

Click here to read the complete Materials Impact Report (PDF format): Materials Impacts On The Precision Machining Industry - Feb 2008