4/11/2008 | 1 MINUTE READ

Material Impacts On The Precision Machining Industry - April 2008

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Prices are rising in materials needed for precision machining despite the economic malaise, lead by the dramatic $162 per ton increase to #1 bundles this week. Dumping cases against Chinese firms for fasteners, threaded rod, and pipe and tube are making news around the world. The talking heads on the TV news shows all seem to agree that there is a slowdown going on. Could someone please tell the Commodities that the Precision Machining Industry consumes that that is the case?

Rising prices for raw materials continues to pressure producers of precision machined products made from those materials, thus encouraging the importation of foreign produced finished products – but only from lower cost economies with government subsidies for manufacturing. Five of the seven items we track are up over same month last year.

This Just In: American Metal Market’s April Factory Bundles Index rose a recordbreaking $162/ton to $555/ton. This is 25% higher than the previous record of $443/ton in November 2004. Robust domestic and overseas demand for scrap, combined with the limited availability of prime scrap due to declining automotive production appears to be the major driver.

Dumping cases against China are in the news both in North America and the EU. Of interest to our industry, on March 26, 2008 the Department of Commerce (Commerce) announced its decision to initiate an antidumping duty investigation of imports of steel threaded rod from the People’s Republic of China (China). Here's a factsheet: http://ia.ita.doc.gov/download/factsheets/factsheet-prc-str-init-032608.pdf

A case on light wall rectangular tube was initiated in January by Commerce as well: http://ia.ita.doc.gov/download/factsheets/factsheet-multiple-rect-pipe-012408.pdf An investigation is ongoing in welded stainless high pressure pipe from China as well.

In Canada duties of up to 91% have been imposed on Chinese pipe.

Steel fasteners from China are subject of a $500 million dollar anti dumping action in the European Union (EU).The European Commission recently issued a formal notice to China regarding a US$500 million anti-dumping case on steel fasteners. The case is reported to be centered on production from Ningbo, and has according to China Customs, more than 100 Ningbo enterprises involved in EU anti-dumping cases. China is the largest producer of fasteners in the world, and Ningbo is China’s most important fasteners manufacturer and exporter, accounting for more than 25% of country's fasteners sales.

The Metals Activity Report from the Metals Service Center Institute reports February shipments of steel products from U.S. service centers were flat, at 4.26 million tons, compared with year-earlier volume, and month-end inventories declined to 12.09 million tons from nearly 12.20 million tons in January.

The talking heads on the TV news shows all seem agree that there is a slowdown going on. Could someone please tell the Commodities that the precision machining industry consumes that that is the case? From where those of us who buy these materials sit, the materials don’t seem to have noticed.