January 2005
Association News

Steel Consumers Still Worried About Price
Service centers executives no doubt are aware that skyrocketing steel prices have placed a hardship on their customers. But a recent survey by one customer group, the Association of Equipment Manufacturers in Milwaukee, quantifies the negative impact of steel prices on members’ businesses.

Every construction and agricultural manufacturer responding to AEM’s survey said they paid higher steel prices in 2004 compared to 2003. Manufacturers continued to experience reduced steel availability and longer delivery times during the fourth quarter. As a result, many AEM members delayed hiring new workers, scaled back business expansion plans and shifted some production to non-U.S. sources.

Half of the AEM survey respondents said they depend solely on domestic steel sources; the remainder obtain steel from a combination of domestic and overseas sources.

“Our survey underscores the adverse impact of steel pricing on our members. We are very concerned about the potential dampening effect this situation will have on the continued economic recovery of the off-road equipment manufacturing industry,” AEM President Dennis Slater said.

Survey respondents said the median steel price increase was 60 percent; many cited increases of 100 percent or more. Some 45 percent of surveyed members expected that steel prices would continue to rise through the first quarter of 2005; only 5 percent anticipated prices would fall.

About 85 percent of respondents have absorbed some or all of steel price increases instead of passing them along to machinery buyers. As manufacturers diverted resources to pay for higher raw material costs, 32 percent said they relocated production capacity offshore or outsourced job work; 23 percent postponed hiring plans; 28 percent put off planned investments; and 15 percent reduced work hours or shut down some or all of their operations.

MSCI
Distributor Shipments Slip Again in October
Service center shipments during 2004 continue well ahead of last year’s pace, despite a second month of decline in October.

U.S. members of the Metals Service Center Institute shipped 4,452,200 tons of products to their customers in October, a 3.5 percent decline from the 4,617,000 tons they shipped in September. October’s shipments also fell nearly 4.4 percent from the same month in 2003.

U.S. MSCI members shipped an average of 212,000 tons per day in October, or 3.6 percent less than the average daily shipments of 219,900 tons during September. October’s average daily volume was still 4.7 percent higher than the same month of 2003.

For the first 10 months of 2004, U.S. members’ shipments totaled 47,469,200 tons, a healthy 14.3 percent increase from the same period of 2003.

Shipments by Canadian MSCI members reached 418,500 tons in October, falling 6.9 percent from the 449,700 tons shipped in September. That figure was 16 percent below the total reached in October 2003.

Canadian members shipped an average of 20,900 tons per day in October, or 2.3 percent below September, and 7.5 percent percent below the average daily volume of October 2003. Year to date, Canadian service centers shipped 4,662,700 tons, a negligible 0.2 percent above the first 10 months of 2003.

U.S. members’ inventories increased nearly 3.3 percent between September and October to 15,379,600 tons. The months-on-hand rate increased to 3.5 from 3.2 in the period—the highest level all year.

Inventories among Canadian members of MSCI totaled 1,119,100 tons in October, growing nearly 4.3 percent from the stocks held in September, and the months-on-hand rate grew to 2.7 from September’s 2.4, the highest rate since July.

CBSA
Red Metals Shipments Trail, But 2005 Looks Promising
Members of the Copper and Brass Servicenter Association said that shipments of copper and copper alloy products declined 2.6 percent during October from September. October shipments also failed to match the same month in 2003, trailing by 4.4 percent.

CBSA notes there were two more shipping days in October 2003, so the average daily shipping rate in October 2004 compared with the year-ago
month was up 4.6 percent.

From January through October, shipments did remain well ahead of 2003 in all product categories with the exception of “other alloy sheet,” which fell just 1 percent. Total copper shipments through October grew 12.6 percent and alloy shipments increased 11.3 percent, for a combined gain of 11.8 percent vs. the first 10 months of 2003.

IISI
World Steel Production Up 9.0% Through November
World crude steel production for the 62 countries reporting to the International Iron and Steel Institute, Brussels, stands at 945.2 million metric tons for the first 11 months of 2004—a 9.0 percent increase over the same period of 2003.

Crude steel production in North America was 11.3 million metric tons in November, a 9.9 percent increase over the same month in 2003. Total production in North America through November was 122.5 million metric tons, up 7.7 percent from 2003.

China produced 25 million tons of crude steel in November, rising 21.2 percent from November 2003. Year to date, Chinese production stands at 245.3 million tons, 22 percent higher than the first 11 months of 2003. Total production in the reporting Asian countries stands at 439.2 million tons for the 11-month period, or 12.5 percent above the same period of 2003.

Production for the 25 countries in the European Union was up 3.6 percent compared to November 2003. From January through November, production increased 5.1 percent to 177.9 million tons.

AIIS
Steel Imports Up 50% Through October
Imports in October declined 11.8 percent from September, but were 71.2 percent higher than in October 2003 and 50 percent higher for the 10-month period of 2004 compared to the same period the previous year.

Imports that arrived in October from non-NAFTA countries were ordered from May through July, when market demand and prices in the United States were surging, says David Phelps, president of the American Institute for International Steel, which represents importers and exporters. “Imports at this level show the strong response of importers attempting to keep up with demand in the U.S. market, as consumer demand at various points in 2004 outpaced the ability of both domestic industry and importers to supply many products.”

While the U.S. market has cooled off since late summer, indications are that early 2005 is shaping up to return to strong demand and higher prices again, Phelps says.

Imports of semifinished steel for conversion by domestic mills continue to play a role, with October imports up 75 percent compared to the same month of 2003, and almost 52 percent higher year-to-date over 2003.

SSINA
U.S. Market Share for Specialty Steel Erodes
The Specialty Steel Industry of North America says imports continue to take market share from domestic producers of specialty steels. Specialty steel imports through September captured 28 percent U.S. market share, 3 points above the comparable 2003 period.

Domestic consumption of total specialty steel increased 11 percent to 2,154,567 tons. Even with the growth in demand, U.S. specialty steel producers lost market share due to a 22 percent increase in imports to 601,996 tons, SSINA reports.

For stainless steel sheet and strip, plate, bar, rod and wire, nine-month import penetration increased 3 points to 26 percent over the same year-ago period. Although U.S. demand for stainless steel products grew 14 percent to 1,812,900 tons, a 28 percent increase in imports to 473,946 tons translated into lost market share for North American mills, says SSINA, which represents domestic producers.

Imports of stainless steel sheet and strip took a 22 percent bite out of the U.S. market, up 3 points from the January-September 2003 period. Imports increased 31 percent to 297,182 tons, offsetting the 14 percent increase in demand to 1,348,741 tons.

Year to date, U.S. stainless steel plate producers lost 7 points of U.S. market share to imports, which now hold 24 percent. Imports increased 50 percent to 53,750 tons, while U.S. consumption rose 6 percent to 221,118 tons. Nine-month import penetration for stainless steel bar remained at 39 percent. Bar imports rose 11 percent to 59,259 tons; consumption rose 10 percent to 151,761 tons.

AWMI
Corporate Membership Benefits Available
The Association of Women in the Metal Industries now offers its member companies corporate membership benefits. Depending on the level of corporate membership chosen, benefits include reduced membership dues, Web site and newsletter advertising and member rates for all corporate member company employees who attend AWMI functions.

AWMI has four corporate members so far: International Steel Group Inc., Main Steel Polishing Co. Inc., IPSCO Tubulars Inc. and Leavitt Tube Co. LLC.
Membership in AWMI is open to women and men seeking professional development and career advancement. Information can be found at www.awmi.org or by contacting Tonya Rideout, director of member services, at trideout@clarionmr.com.

ASD
Association Opens Online Market
The Association of Steel Distributors has announced a new benefit to help members increase sales and make new business contacts. The Online Marketplace at www.steeldistributors.org gives ASD members an opportunity to sell or request materials throughout the industry and allows non-members to view listings of materials for sale.

The site is viewable by anyone in the industry without an access code, though only ASD member companies will be able to place product postings.
Visitors to the site can view products by type or gauge. The system also has advanced search capabilities for more specific details. By clicking on a product, the buyer or seller’s contact information appears.

“Our goal is to offer the industry a virtual marketplace that will become a vital tool to help drive sales,” says ASD President Steve Bergman, owner of Premier Steel Inc., Englewood Cliffs, N.J. “We also think that the ability to post material in the Online Marketplace makes ASD membership a must for all companies in our industry.”

To ensure that the site lists only the most current product information, all information will be frozen each Monday morning. Each posting must be re-activated or deleted at that time.

MSCI
5 Aluminum Products Added to Metals Activity Report
U.S. and Canadian shipment and inventory data for five types of aluminum products have been added to the monthly Metals Activity Report published by the Metals Service Center Institute, Rolling Meadows, Ill.

Included is data on actual aluminum shipments from metals service centers, in tons, with comparisons to the same month a year ago; shipment information on a year-to-date basis; month-end inventory levels compared with the same month in the previous year; and an estimate of months of supply on hand.
Statistics are provided for all aluminum products, extruded shapes, plate, rod and bar, sheet and coil, and pipe and tube, broken down separately for the U.S. and Canada.

The aluminum component of MAR supersedes an older report, Aluminum Quick Pulse, a limited shipments and inventory survey that lacked product category detail.

Chris Marti, MSCI’s vice president for research and technology, says the aluminum data is based on figures given by member companies, with benchmarks for product categories and the industry’s size based on analysis of information from industry and government sources, comparisons with final market demand, monthly historical data from participating companies from January 2001, and industry intelligence provided by a panel of reviewers comprising MSCI Management Information Committee members.

“With our new aluminum report, we provide 24 months of real data, seasonal adjustments for members, three-month projections for participating service centers, and category detail,” Marti says.

People
The Association of Steel Distributors, Chicago, named Maurice F. Loeffel Jr., president of Loeffel Steel, as its 2004 Honorary Steel Man of the Year. He will receive the award at the group’s annual meeting March 6. An 18-year member, Loeffel served as president for three years during which the industry faced changes of historic proportions. “It is a testament to Maurice’s character and his commitment to our industry that ASD survived these challenging times,” says Steve Bergman, ASD president. Tom Smith, ASD member and president of B&D Steel Co., says Loeffel “deserves this honor because he holds ASD at heart. He’s a good man, a good family man and a great business man.”

The Association of Women in the Metal Industries named Patricia Cardamone of Main Steel Polishing as its 2004 Member of the Year during November’s AWMI International Conference in Dallas. An active member for 21 years, Cardamone has served on chapter, regional and international boards for 19 years. She has been with Main Steel since 1997, where she works as a product specialist in inside sales.

Dennis Keat, CEO of Su-dan Corp., has been named chairman of the board of the Precision Metalforming Association, for a one-year term. Keat has been with Su-dan since 1975 and has served as CEO since 1993. He has been a PMA member for nearly 25 years. Bernie Rosselli of Stewart EFI LLC, and Wes Smith of E & E Manufacturing Co. Inc. are the new first and second vice chairmen, respectively.

 
 

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