Want a Bigger Slice?
Help Bake a Bigger Pie

“Why aren’t we working together to make our pie bigger, to find ways to sell more product?” asked Gary Chess of National Tube Supply. His rhetorical question echoed a common theme voiced by speakers at last month’s MSCI Tubular Division conference in Tucson—“let’s bake a bigger pie instead of just filching bites from the guy next door.”

The cute pie analogy belies the serious challenge posed by the speakers: a commitment by tubing producers and distributors to share resources as never before to expand the tubing market.

Tube mills and their distributors have traditionally had a love-hate relationship, observed Dennis Lasker of Plymouth Tube Co., a bit like teenage brothers and sisters. “We are in the same family, we have a lot in common, but we don’t always see eye to eye.” The industry needs to change its working culture—the level of cooperation between mills, distributors and end-users—with the ultimate goal of strengthening U.S. manufacturing, he said.

Larry Milliron of Dofasco-Copperweld said mills, service centers and OEMs must trust each other enough to disclose more information and work together to drive costs out of the entire supply chain. Like a three-legged stool, such marketing alliances will topple unless all three partners are committed to sharing the risks and the benefits.

Chess noted that some of National’s top customers are companies it converted from bar to tube for their applications, selling them on tube’s advantages of strength at lower weight and cost. Such conversions offer huge opportunity. The mechanical tube market is estimated at 3.2 million tons, while the bar market is seven or eight times bigger. “If you take just 1 percent of bar, you are talking about 200,000 tons of potential new tube product sales,” he said.

Marketers of mechanical tubing aspire to emulate the structurals sector, where producers and distributors of HSS have had some success in convincing architectural designers to substitute steel for concrete. Yet there remains much untapped potential for tubing in construction applications, asserted Joseph Anderson of PDM Steel Service Centers.

The American Institute of Steel Construction, whose mission is to make structural steel the construction material of choice, has eight regional engineers who influence about 900 construction projects per year. While that may sound great, it’s only a fraction of the 90,000 total projects in the United States last year. By comparison, concrete industry associations have over 400 engineers promoting the use of concrete solutions. “We’re vastly outnumbered,” Anderson noted.

Key decision makers—architects and contractors—see the steel industry as big, remote and unfriendly, compared to the familiar face at the local concrete batch plant, he said. “We have a superior product, but we are seen as distant and unapproachable. We need to change that perception.”

It’s not just the mills’ job to grow the market for tubular goods. Service centers should embrace their role as the link between production and consumption and take ownership of the supply chain, Anderson added. “We as distributors need to take a more active role in promoting our product.”

Clearly it’s time, brothers and sisters, to stop eyeballing your neighbor’s plate, and pitch in to bake a bigger pie.