http://www.metalcenternews.com RSS feeds for Metal Center News 60 http://www.metalcenternews.com/Editorial/CurrentIssue/May2012/tabid/5806/articleType/ArticleView/articleId/6869/MCN-Feature.aspx#Comments 2 http://www.metalcenternews.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=5806&ModuleID=13936&ArticleID=6869 http://www.metalcenternews.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=6869&PortalID=51&TabID=5806 http://www.metalcenternews.com/Editorial/CurrentIssue/May2012/tabid/5806/articleType/ArticleView/articleId/6869/MCN-Feature.aspx Top 10 Service Center Equipment Brands Service center executives reveal their favorite makes of metal processing equipment in this informal brand survey by Metal Center News. Red Bud Industries, DoALL, Hypertherm and KASTO lead their respective categories in the Metal Center News Top 10 Service Center Equipment Brands lists for 2012. Information for these brand rankings was compiled in a series of e-mail polls conducted in fourth-quarter 2011 and first-quarter 2012. Respondents were given an alphabetical list of the 14 largest companies in each product category with instructions to “check all they would endorse and buy from in the future.” Respondents also had the opportunity to write in additional company names or brands not on the lists. The final ranking, based simply on the total number of votes each company received, gives a rough indication of which brands currently command the largest share of mind, and highest levels of customer satisfaction, among service center executives. This methodology does not attempt to rank companies by size or market share, but rather to measure the relative level of brand awareness they have achieved among respondents to MCN’s surveys. Capital spending among service centers continues to increase in 2012. The average service center in North America will spend about $418,400 on new equipment this year, according to the latest MCN data. The industry’s leading equipment vendors report that sales and inquiries have continued the strong rebound that began in 2011, following two weak years for the U.S. economy. Coil Processing Leading makers of coil levelers, slitters, cut-to-length lines, straighteners, edge conditioners, shears, press brakes and accessories. 1. Red Bud Industries Red Bud Industries, Red Bud, Ill.: cut-to-length, blanking, multiblanking, slitting, stretcher leveling, EPS acidless pickling, www.redbudindustries.com 2. Herr-Voss Stamco Herr-Voss Stamco, Callery, Pa.: cut-to-length, multiblanking, slitting, Strand Extensioner slitting, tension leveling, process lines, www.herr-voss.com. 3. Braner USA/Loopco Braner USA, Schiller Park, Ill.: roller leveling, slitting, cut-to-length, blanking, multiblanking, packaging, scrap chopping, traverse winding, specialty coil processing lines, www.braner.com. 4. Delta Steel Technologies Delta Steel Technologies (formerly known as DBI), Irving, Texas: cut-to-length, slitting, shearing, tempering, pickling, cold rolling, galvanizing, coating lines, www.dbimfg.com. 5. Butech Bliss Butech Bliss, Salem, Ohio: coil processing, cut-to-length, slitting, pickling, leveling, shearing, scrap chopping, material handling, tempering, mill equipment, extrusion and forging presses, engineering services, www.butechbliss.com. 6. Bradbury Co. The Bradbury Co. Inc., Moundridge, Kan.: coil processing, cut-to-length, leveling, shearing, rollforming, stacking, automation, www.bradburygroup.com. 7. Leveltek Leveltek International LLC, Benwood, W.Va.: stretch leveling systems for light- to heavy-gauge cut-to-length, coil-to-coil lines, www.leveltekint.com. 8. Chicago Slitter Chicago Slitter, Itasca, Ill.: coil slitting, blanking, cut-to-length, shearing, punching, bending, packaging, scrap handling equipment, www.chicagoslitter.com. 6. SMS Demag/Pro Eco SMS Demag/Pro Eco Strip Processing Systems, Oakville, Ontario: slit coil strapping, cut-to-length, leveling, coil coating, galvanizing, edge trimming, pickling, specialty purpose lines, www.sms-demag.ca. 10. Machine Concepts Machine Concepts, Minster, Ohio: coil processing, slitting, side trimming, specialty equipment, www.machineconcepts.com. Sawing Leading makers of band saws, plate saws, circular saws, blades, cutting fluids and accessories. 1. DoALL DoALL Sawing Products, Wheeling, Ill.: bandsaws, blades, cutting fluids, material handling, www.doallsawing.com. 2. Hyd-Mech Hyd-Mech Group Ltd., Woodstock, Ontario: band saws, circular cold saws, material handling, www.hyd-mech.com. 3. Amada Amada Machine Tools America Inc., Schaumburg, Ill.: bandsaws, circular saws, blades, pipe cutters, chip compactors, material handling, www.amadabandsaw.com. 4. HE&M Saw HE&M Saw Inc., Pryor, Okla.: band saws, plate saws, metalworking fluids, material handling equipment, accessories, www.hemsaw.com. 5. Marvel/Spartan Marvel Manufacturing Co. Inc., Oshkosh, Wis.: bandsaws, plate saws, circular saws, ironworkers, www.sawing.com. 6. Metlsaw Metlsaw Systems Inc., Benicia, Calif.: circular saws, plate saws, cutoff saws, cold saws, extrusion saws, remnant saws, combination saws, material handling, www.metlsaw.com. 7. KASTO KASTO Inc., Export, Pa.: band saws, circular saws, hacksaws, storage systems, www.kastoinc.com. 8. Behringer Behringer Saws Inc., Morgantown, Pa.: horizontal band saws, plate saws, hacksaws, circular cold saws, structural fabricating equipment, www.behringersaws.com. 9. Cut Technologies Cut Tech USA Inc., Bellingham, Wash.: metalcutting bandsaws, circular saws, blades, www.cuttech.com. 10. Peddinghaus Peddinghaus Corp., Bradley, Ill.: structural band saws, miter saws, material handling, plate processing, ironworkers, www.peddinghaus.com. Cutting Leading makers of oxyfuel, plasma and laser cutting systems and accessories. 1. Hypertherm Hypertherm Inc., Hanover, N.H.: plasma, laser cutting equipment, controls, consumables, www.hypertherm.com. 2. Messer Cutting Systems Messer Cutting Systems, Menomonee Falls, Wis. (formerly Messer MG): CNC laser, plasma, oxyfuel cutting systems, www.mg-systems-welding.com. 3. ESAB ESAB Welding & Cutting Equipment, Florence, S.C.: welding, laser, plasma, oxyfuel, waterjet cutting, controls, www.esab-cutting.com. 4. Koike Aronson Koike Aronson Inc., Ransome, Arcade, N.Y.: oxyfuel, plasma, laser, waterjet cutting, welding equipment, www.koike.com. 5. Trumpf Trumpf Inc., Farmington, Conn.: laser cutting, machine tools, www.us.trumpf.com. 6. Amada Amada America Inc., Schaumburg, Ill.: lasers, turrets, press brakes, fabrication equipment, www.amada.com. 7. Cincinnati Cincinnati Inc., Harrison, Ohio: lasers, shears, press brakes, stamping presses, www.e-ci.com. 8. Mazak Mazak Corp., Florence, Ky.: cutting tools, machining centers, www.mazakusa.com. 9. Komatsu Komatsu America Industries LLC, Cutting Technologies Div., Rolling Meadows, Ill., plasma cutting machines, www.komatsuplasma.com. 10. Bystronic Bystronic Inc., North America, Elgin, Ill.: laser cutting, waterjet cutting, automation, www.bystronicusa.com. Material Handling Leading makers of automated storage and retrieval systems, racks, shelving, coil-handling equipment, conveyors, cranes, magnetic lifters, and other devices and accessories. 1. KASTO KASTO Inc., Export, Pa.: automated storage and retrieval systems, bar/linear storage systems, sheet metal storage systems, www.kastoinc.com. 2. Walker Magnetics Walker Magnetics, Worcester, Mass.: magnets for workholding, clamping, lifting, separation, www.walkermagnet.com. 3. Butech Bliss Butech Bliss, Salem, Ohio: coil cars, stacker lift tables, conveyors, upenders, www.butechbliss.com. 4. Coiltech Corp. Coiltech Corp., Schiller Park, Ill.: coil processing and handling equipment, coil cars, coil upenders, coil grabs, coil lifts, www.coiltechcorp.com. 5. Caldwell Co. The Caldwell Group Inc., Rockford, Ill.: pallet lifters, coil upenders, coil hooks and grabs, slings, lifting and spreader beams, mechanical, vacuum and magnetic sheet lifters, lift truck accessories, www.caldwellinc.com. 6. Canrack/Metal Center Systems Canrack Storage Systems Inc., Mississauga, Ont.: racks for sheet, plate, bar, coil products, www.canrack.com. 7. Alcos Machinery Alcos Machinery Inc., Newmarket, Ontario: coil packaging equipment, coil cars, turnstiles, turntables, upenders, downenders, stackers, strapping machines, conveyors, www.alcos.ca. 8. Cattron Group Cattron Group International Inc., Sharpsville, Pa.: radio remote controls for overhead cranes, www.cattrongroup.com. 9. UNARCO/Kingway Inca-Clymer UNARCO Material Handling Inc. (which now owns the Kingway Inca-Clymer brand), Springfield, Tenn.: pallet racks, shelving, mezzanines, automated storage and retrieval systems, www.unarcorack.com. 10. Morris Material Handling Morris Material Handling, Oak Creek, Wis.: overhead cranes, hoists, www.morriscranes.com. Mon, 18 Jun 2012 19:11:00 GMT f1397696-738c-4295-afcd-943feb885714:6869 http://www.metalcenternews.com/Editorial/CurrentIssue/May2012/tabid/5806/articleType/ArticleView/articleId/6868/MCN-Feature.aspx#Comments 0 http://www.metalcenternews.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=5806&ModuleID=13936&ArticleID=6868 http://www.metalcenternews.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=6868&PortalID=51&TabID=5806 http://www.metalcenternews.com/Editorial/CurrentIssue/May2012/tabid/5806/articleType/ArticleView/articleId/6868/MCN-Feature.aspx Renewed Faith in Market Sparks Buying Frenzy Service centers and equipment manufacturers both report vastly improved capital spending as the market downturn recedes further into the past. For the past two years, a still-skittish service center industry has begun to expand its capital investment. In 2012, the cautious attitude has been replaced by ambitious objectives. Both service center executives and major equipment manufacturers indicate that capital spending has rebounded in a big way. The level of expenditures may not rival the pre-recession outlays, but it’s getting close. “I would suggest that this year will be markedly greater from a capital spending perspective than 2011 or 2010,” says Tom McGrogan, president of Ontario and Western Canada service centers and vice president of operations for Samuel, Son & Co., Ltd., Mississauga, Ontario. “We’re probably going to be 25 to 30 percent greater from a capital spending perspective on the service center side.” And Samuel isn’t alone in planning such a large increase. During its January conference call with investors, Reliance Steel & Aluminum Co. officials indicated their company’s capital expenditures were likely to jump more than 60 percent to a record $250 million this year. Los Angeles-based Reliance will spend its money buying out some leases of companies it has acquired, building new facilities here and abroad, adding processing capabilities and doing routine maintenance. “If you look back at 2009, when things were pretty difficult, we cut back severely,” Chairman and CEO David Hannah said. “Now we are catching up, to a certain extent, on some of the stuff we did not do back then. It really is an indicator of the confidence we have in these markets.” That confidence is reflected throughout the industry. The average service center expects to spend about $418,000 on new equipment this year, according to the most recent Metal Center News reader survey (see sidebar). That figure is 5.9 percent higher than a year ago, which in turn was up substantially from 2010. A.M. Castle and Co., Oak Brook, Ill., has budgeted $15 million for capital expenditures this year, up about 25 percent from 2011. That figure represents about 1 percent of revenue, which is what a typical year would look like in the rare event of a typical year, says Scott Stephens, vice president of finance and chief financial officer. “If a year were normal, where we did our typical maintenance and a little bit of growth, that 1 percent of revenue would handle it. But almost no year is normal,” he says. This year, in addition to routine projects, Castle’s spend will cover some computer upgrades. “We kind of cycled through IT a few years ago because we implemented Oracle, then it cycled down. We’ve been static for 24-36 months on the PC side, and that backlog will get cleared out a little in 2012,” Stephens adds. Steel Warehouse, South Bend, Ind., has three major projects scheduled in 2012, says CEO Dave Lerman. The company is installing a temper mill cut-to-length line in Houston in partnership with Triple S Steel; a high-strength, heavy-gauge pickle line in Mobile, Ala.; and a stretcher leveler at its Milwaukee operation. “The rest of our cap ex is based on improvements and replacement of old equipment. The standard kind of stuff that has to be attacked from time to time,” says Lerman. Increased spending at Samuel will go toward equipment that expands traditional value-added services, as well as adding capabilities that open the company to new customers. As an example, McGrogan points to the increased use of higher-strength steels in automotive applications. Samuel is adding new, more-heavy-duty equipment designed to handle it. Though capital budgets typically are set in the fall, most companies are opportunistic if the situation arises. “We do our capital planning in the fall of the year and extend it out as a five-year plan, but within any given year, if we see a solid business opportunity, we take advantage of it,” McGrogan says. Equipment manufacturers’ POV North America’s leading equipment manufacturers are in agreement with their service center customers that spending is on the rise. “Eighty percent of our business is with steel service centers,” says Werner Rankenhohn, president of KASTO Inc., Export, Pa. “For the first quarter of this year, I can honestly say it’s the best we’ve ever had.” Most equipment vendors say the market started to turn sometime in the last two years and has grown steadily ever since. “Beginning in 2010, it started to come back around,” says Joerg Toberna, marketing manager for Messer Cutting Systems Inc., Menomonee Falls, Wis. “Now we’ve got a very nice backlog. People are looking to get equipment faster than we can get it to them.” And it’s not just the service centers. “We not only supply to the steel service centers, but also to their customers. We see very good trends coming from their customers, as well,” says Carl Wallin, director of sales [ARE YOU SURE HE IS NOT PRESIDENT?] of the Caldwell Group, a Rockford, Ill., material handling equipment supplier. The level of activity is somewhat surprising, Toberna says, given that most customers tend to be cautious during election years. “Obviously, customers have been sitting so long with money in their pockets. In years past, when there was an election year, things would tail off. But pent-up demand is overcoming that.” Not only is the number of orders picking up, but also the size. “Our growth started out with some smaller orders, retrofits, that type of thing, and gradually picked up to larger and larger orders,” says Chuck Damore, executive vice president of Braner USA, Schiller Park, Ill. “Now we are seeing a lot more significant investment by companies, with a fair amount of expansion, as well.” Investment in the big-ticket item, the equipment makers believe, is a testament to the faith these companies have in their markets. “Nobody is going to spend a couple of million dollars if they don’t believe they’ll have a return on investment in the next two or three years,” Rankenhohn says. Wallin at Caldwell says he not only has been selling more machinery, but more advanced machinery. “We’re seeing trends into more of the hydraulic sheet lifter rather than mechanical or motorized, automated coil grabs rather than standard coil grabs,” he says. During and in the months after the recession, companies were willing to make do with less ambitious purchases just to get by. “Now they’re willing to spend the extra bit to get the productivity gains.” There is some geographic tilt to the buying trend. Executives agree that customers in the middle and southern parts of the country have led the recovery, while the East remains quieter on the capital expenditures front. Even a company headquartered there, such as Arcade, N.Y.-based Koike Aronson, has experienced the imbalance. “The Northeast—New England, eastern New York and New Jersey—has been slow for us,” says Jerry Leary, Koike president. “But the Southeast and Midwest have been very good.” One trait in customer preference is the continued movement toward more automation, Leary says. “They want to get away from as much manual input as possible, to minimize the labor content.” Additionally, equipment manufacturers are selling more machines in the United States. In 2009, Red Bud Industries, Red Bud, Ill., sold 80 percent of its equipment overseas. Today, it’s back to its more historical 50-50 split between domestic and foreign buyers, says Dean Linders, vice president of marketing. Linders points to a few notable trends. For starters, companies are looking to process heavier gauge plate and higher-strength steels. “Once one or two guys in an area get one [a heavy-gauge line] and it works out well for them, then the competition follows within a year or two,” he says. New technologies are attracting attention from service center buyers. Among them is EPS, an “acidless pickling process” developed by The Material Works, in partnership with Red Bud. EPS uses a slurry blasting process rather than acid to remove dirt and scale from the surface of steel coils. Damore of coil processing specialist Braner says automotive and other industries’ move toward higher-strength steels is continuing to drive many decisions. “It’s becoming more commonplace, so much so that if a customer doesn’t specify he’s going to run some high-strength material, we make it a point to bring it up.” Also contributing to the more robust market is the overall business environment. An extension of tax credits and accelerated depreciation makes buying more attractive, and even companies without large cash reserves can access credit more easily. “There seems to be a lot more financing available than there was between the end of 2008 and the end of 2010,” Leary says. “Now, if you’re creditworthy, you’re going to get the financing.” All of this makes for a healthy outlook for metal processing equipment makers. “There’s pent-up demand, and a lot of the large markets we serve are going gangbusters. It’s a combination,” Leary says. Mon, 18 Jun 2012 18:59:00 GMT f1397696-738c-4295-afcd-943feb885714:6868 http://www.metalcenternews.com/Editorial/CurrentIssue/May2012/tabid/5806/articleType/ArticleView/articleId/6867/MCN-Feature.aspx#Comments 0 http://www.metalcenternews.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=5806&ModuleID=13936&ArticleID=6867 http://www.metalcenternews.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=6867&PortalID=51&TabID=5806 http://www.metalcenternews.com/Editorial/CurrentIssue/May2012/tabid/5806/articleType/ArticleView/articleId/6867/MCN-Feature.aspx 'Just Wait Until Next Year' Most producers of expanded and perforated metals are hoping that continued increases in consumer and business confidence will translate into a surge of pent-up demand next year. In the meantime, they have to be satisfied with small, incremental gains in sales of these niche products. Unlike in other regions of the world, U.S. producers generally do not make both expanded and perforated metal products. Nevertheless, the two markets are interconnected as they both deal in metal sheets with holes in them and are often used in similar applications, says David Brenneman, executive vice president of McNichols Co., a Tampa, Fla.-based distributor of “hole” products. Expanded metals start as sheets that are slit and stretched into a grating with diamond-shaped openings of various sizes. Perforated metals start as sheets that have holes punched in specific sizes and shapes. As opposed to the perforating process, expanding metals produces little or no scrap. Both bring certain esthetic and practical functionality to different applications. About 63 percent of all expanded and perforated products are made of carbon steel (either uncoated or galvanized), while stainless steels account for 22 percent and aluminum 15 percent of the total, Brenneman estimates. Aluminum and stainless have been gaining share due to their anticorrosion properties and lower maintenance in exterior applications. Brenneman says demand for all hole products is up over last year, although the rate of increase for perforated metals, at about 12 percent, is higher than the 5 percent for expanded metals. “That is partly because perforated metals were hit harder during the recent recession than more commodity-like products such as expanded metals. Therefore, perforated metals have more room to bounce back from their low point,” he says. Gary Huppert, marketing manager for Accurate Perforating, Chicago, says demand for perforated metals was strong in 2010 and 2011, but he has seen a marked slowdown in orders this year across the various markets his company serves. “We are working hard not to go backwards, but our profits are being squeezed,” he says, as customers in some markets are price sensitive due to the high level of international competition they face. Other suppliers remain optimistic that 2012 will finish up slightly better than 2011, as many end markets continue to gain steam. Some are even hopeful that 2013 will be a much better year for perforated and expanded metals. Based on strengthening sales in the first quarter, perforated metals are on track to increase 13-14 percent on a tonnage basis this year, says Michael J. Gilboy, vice president of Quality Perforating Inc., Carbondale, Pa. “As we move forward, we are seeing heightened optimism about the business climate,” says a spokesman for supply chain management at O’Neal Steel Inc., Birmingham, Ala. “We expect steady to moderate improvement.” Despite the construction sector’s ongoing struggles, 2012 should be a good year for perforated metal products, agrees David Simpson, given the improving fundamentals of such major markets as energy, automotive and industrial equipment. “As the world gets greener, faster, noisier and dirtier, it is good for perforated metals,” says Simpson, president and CEO of Diamond Manufacturing Co., Wyoming, Pa., a subsidiary of Reliance Steel and Aluminum Co. The market dynamics are similar for expanded metals, with demand up a surprising 10-20 percent so far this year, according to officials of the Expanded Metal Manufacturers Association, which is part of the larger National Association of Architectural Metal Manufacturers. Metal perforators are represented by a separate trade group, the Industrial Perforators Association. “It [expanded metal] hasn’t been growing like wildfire, but we are seeing steady and solid growth,” adds Rod Miller, president of Spantek Expanded Metal, Hopkins, Minn. Expanded metal companies that serve such robust markets as energy and automotive have been seeing even more impressive growth rates, says Rick Bahner, managing member of Expanded Solutions LLC, Oklahoma City, Okla. His business has been “going like gangbusters” to keep up with demand from the oil and gas sector in the region, he says, necessitating the addition of 10 employees so far this year. For companies such as Alabama Metal Industries Corp., Birmingham, Ala., which sell most of their expanded metal products through distributors, it is harder to pinpoint what’s driving the growth. “This is especially true since there are about 100 different uses of expanded metal,” says Jim Quinn, AMICO’s corporate product manager. Because of the broad range of applications for perforated and expanded metals, these products tend to track closely with the general economy, say the experts. Overall activity in the U.S. industrial sector is expanding. According to the Federal Reserve Board, March industrial production was up 3.8 percent year on year. “Manufacturing in general is the shining star of the U.S. economy,” notes Gilboy at Quality Perforating. On the other hand, some factors are having a dampening effect on the economy and manufacturing, including the uncertain U.S. political and regulatory climate. “Whenever these uncertainties are lifted, it will release long-term pent-up consumer demand, which in turn will spur parabolic growth,” predicts Brenneman. “Until then, there will be just a trickle of demand building up slowly.” The surging automotive market is one of the strongest sectors for suppliers of hole products. Experts forecast automotive production of 14.5 million cars and light trucks this year, up from 13.1 million vehicles last year, 11.9 million in 2010 and 8.6 million in 2009 at the depth of the recession. Perforated or expanded sheets are often used to contain insulating material for noise reduction in cars and trucks. They are also used in aftermarket parts such as filters and exhausts. “Even with people buying fewer cars than they did prior to the downturn, they are taking good care of their current vehicles. That means more aftermarket purchases,” says Spantek’s Miller. The energy sector is also a high-growth market, with U.S. oil and natural gas drill rig activity up 8.7 percent year on year. Bahner at Expanded Solutions says these products are used not only for filters in oil and natural gas drilling and transmission equipment, but also for security around the rig site, including guardrails, barriers and mezzanine catwalks. Expanded and perforated metals are also used for solar applications, Brenneman says, including for rooftop supports and visual screening of solar panels. In contrast, the use of expanded and perforated metals in building and construction has been weak, especially for new construction. “One indicator of where commercial construction is going is office furniture,” Spantek’s Miller says, noting that the office furniture market is down 10-20 percent. He does not expect to see any significant pickup in commercial construction and hole product consumption for at least the rest of the year. But there are signs that new construction may be due for an upturn. For example, the Architecture Billings Index of the American Institute of Architects remained positive for the fifth straight month in March. This is a leading indicator of a pickup in building activity within the next nine to 12 months. Meanwhile, companies are actively upgrading and remodeling existing commercial facilities using expanded and perforated products for both functional and aesthetic applications, suppliers say. Although building and construction remains weak on the whole, perforated and expanded metals have been getting support from the “green” movement. Materials with holes, like wire cloth or mesh, are used on building facades as sun screens, for example. “In addition to reflecting the heat, therefore reducing air conditioning costs, expanded and perforated metals reflect light so there isn’t as much need for shading,” Brenneman notes. “There could be even more architectural projects as we make young, and even some old, architects aware of the advantages of our product,” Quinn adds. How much of expanded and perforated metal is sold direct and how much through distribution varies widely company by company and product by product, say suppliers. By some estimates, distribution’s share is as low as 25 percent, by other estimates as high as 70 percent. Expanded metal, due to its more commodity nature, is more likely to be sold by distributors vs. perforated products, which tend to have a higher percentage of customized orders. “With the demand for expanded and perforated metals so sporadic, and with the options so varied with all the combinations of material type, hole size, gauge and sheet size, a lot of distributors keep their inventories low and buy only on an as-needed basis,” Brenneman says. “If they buy for stock, they are cautious. It’s easy for them to wind up with a herd of ‘white elephants’ after a couple of years if they try to stock most of these items.” Service centers’ cautious attitude toward hole products has changed somewhat, says Huppert at Accurate Perforating. The amount of perforated metals sold through distribution is rising a bit, as some distributors have changed their selling models and are now going after larger projects on their own. “More service centers are coming to us, as their sales managers have found they can increase profits by adding perforated metal to truckloads of raw coils and sheets,” he says. Service centers are more likely to sell standard-sized sheets, generally 4-by-8 and 5-by-10 foot product, Bahner says. More custom-sized sheet, as well as product with custom-sized holes, is more likely to be sold directly to the OEMs by producers. “We have made a conscious decision to keep our inventories leaner than in the past—not just for expanded metals, but for other products as well,” the O’Neal spokesman says. With producer lead times a relatively short two to three weeks, and suppliers keeping more commodity-grade material on the floor, service centers don’t have to take on the inventory risk, he adds. Producers are trying to keep their inventory risk to a minimum, as well, Bahner says. “We are taking a lesson from the service center industry and watching our inventory turns more carefully. The steel we get today we ship out in the next few weeks.” There has been some consolidation in the hole products market, but mostly tied to succession of family-owned businesses. One notable move was Reliance’s October 2010 purchase of Diamond Manufacturing, a privately held perforator for 96 years. Reliance followed that up with the purchase of McKey Perforating Co. Inc., New Berlin, Wis., and McKey Perforated Products Co. Inc., Manchester, Tenn., earlier this year. Other service centers are unlikely to follow Reliance’s lead. Perforated and expanded metal is a craft industry requiring a lot of technical expertise and specialized equipment, Gilboy says. “While service centers like to provide added value, buying a perforated or expanded metal producer is somewhat outside the box.” Mon, 18 Jun 2012 18:50:00 GMT f1397696-738c-4295-afcd-943feb885714:6867 http://www.metalcenternews.com/Editorial/CurrentIssue/May2012/tabid/5806/articleType/ArticleView/articleId/6866/MCN-Feature.aspx#Comments 0 http://www.metalcenternews.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=5806&ModuleID=13936&ArticleID=6866 http://www.metalcenternews.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=6866&PortalID=51&TabID=5806 http://www.metalcenternews.com/Editorial/CurrentIssue/May2012/tabid/5806/articleType/ArticleView/articleId/6866/MCN-Feature.aspx Good Start to 2012 In their first-quarter conference calls with analysts and investors, executives from leading service centers reported strong sales and income growth. Metals USA Sales, Income Show Improvement Metals USA Holdings Corp., Fort Lauderdale, Fla., reported improved sales and income during the first quarter compared to the same period in 2011. Net sales were up 22 percent to $525.3 million, while net income rose 32 percent to $16.3 million for the service center company. “As we expected, the first quarter was indeed more profitable than the fourth quarter,” said Lourenço Gonçalves, the company’s chairman, president and CEO, noting that the results were achieved in a less than ideal business environment. “Our performance is a clear indication that Metals USA's cost-efficient, customer-focused business model is not only benefiting from, but outperforming, the current economic recovery.” Compared to the previous quarter, Metals USA’s shipments increased 23 percent, revenues were up 15 percent and net income improved 16 percent. Metal shipments totaled 403,000 tons for the first quarter of 2012, up 10 percent from the first quarter of 2011. Toll processed tonnage declined 11 percent to 40,000 tons. Gonçalves said the decline in toll processing tonnage was “the result of successful efforts to upgrade traditional toll activity into full service center type of business, which includes metal sales besides service provided.” He said the company pursues this conversion where “it makes sense for the customer and is more profitable for Metals USA.” During the quarter, Metals USA announced the purchase of Gregor Technologies, its fourth acquisition since its IPO in April 2010. The company claims the integration of Gregor Technologies enhances Metals USA’s position and market share within important sectors, including aerospace, defense, homeland security and office equipment. Gonçalves said the M&A market remains active. “We are seeing business owners more willing to engage, more willing to discuss, while being more realistic in terms of their price expectations.” Demand improved across most of the company’s sectors, led by automotive, aerospace, and oil and gas field services. The company expected that trend to continue in the second quarter. “We do not see steel mills interested in increasing prices, therefore we expect steel prices to remain range bound during the second quarter,” he said. “Nevertheless, based on our current order book and committed business, which is priced based on a delayed index mechanism, we reiterate our expectation that Metals USA Q2 results will be more profitable than Q1.” Gonçalves also expressed no concern over mill lead times, noting that they have little to no bearing on Metals USA. “We buy what we need to buy. We don't buy excessive material and we don't speculate. You should see mill lead times as much more of an indication for the overall level of orders for mills. It doesn't change the way we operate our business.” Reliance Steel & Aluminum Sales Up 20%, Earnings Up 25% Reliance Steel & Aluminum Co., Los Angeles reported first-quarter 2012 net income of $116.2 million, up 26 percent from first-quarter 2011 and 71 percent from the previous quarter. Sales for the 2012 first quarter totaled $2.29 billion, up 20 percent from the 2011 first-quarter and up 13 percent from the 2011 fourth quarter. Reliance’s tons sold for the 2012 first quarter were up 13.8 percent from the prior-year quarter and 11.2 percent from the previous quarter. Average prices per ton sold in the 2012 first quarter were up 5.3 percent compared to the 2011 first quarter and up 1.3 percent compared to the 2011 fourth quarter. For the 2012 first quarter, carbon steel accounted for 52 percent of Reliance’s net sales; aluminum sales were 15 percent; stainless steel sales were 15 percent; alloy sales were 12 percent; toll processing sales were 2 percent; and other sales were 4 percent. “As we indicated in our earnings guidance update last week, the quarter overall was better than we originally anticipated. Demand was stronger, especially in January and February, aided in part by a more favorable pricing environment for most of our products. Sales dollars per day in March were down slightly from February due to a drop in tons sold per day, as the direction of carbon steel pricing became a little uncertain and stainless steel surcharges decreased,” said David H. Hannah, chairman and CEO of Reliance. “Once again, the markets that continued to provide the most growth during the quarter were oil and gas, aerospace, farm and heavy equipment, and auto through our toll processing businesses. Semiconductor and general manufacturing also remained strong. We have seen improvements in our non-residential construction-related businesses, but it still lags the growth seen in other areas. We are very fortunate that Reliance has such a broad range of products and substantial customer diversification. Those attributes have helped our operating results to be less volatile,” Hannah said. “Our balance sheet is in excellent shape, and the liquidity available on our credit facility provides ample room for continued growth both organically and through acquisitions, where we have seen increased activity recently. “We expect real demand to continue its steady improvement from existing levels for most of our products with larger improvements in the aerospace and energy-related industries during the second quarter. There is still some uncertainty regarding the direction of prices for some of the metals we sell, with prices currently moving in different directions for different of our products, but all within manageable ranges,” he added. Effective April 3, Reliance acquired National Specialty Alloys, LLC, a global specialty alloy processor and distributor of premium stainless steel and nickel alloy bars and shapes, headquartered in Houston, Texas. NSA was founded in 1985 and has additional locations in Anaheim, Calif.; Buford, Ga.; and Tulsa, Okla. NSA had net sales of approximately $96 million for the 12 months ended Oct. 31, 2011. NSA’s primary end market is the energy market, with aerospace, power generation, petrochemical and other major end markets. Reliance also recently announced that it has signed an agreement to acquire Worthington Steel Vonore’s Tennessee plant, a processing facility owned by Worthington Industries Inc. Upon closing of the deal, the Vonore plant will operate as a location of Precision Strip Inc., a Reliance subsidiary, and will process and deliver carbon steel, aluminum and stainless steel products on a toll basis. Mon, 18 Jun 2012 18:17:00 GMT f1397696-738c-4295-afcd-943feb885714:6866 http://www.metalcenternews.com/Editorial/CurrentIssue/May2012/tabid/5806/articleType/ArticleView/articleId/6865/MCN-Feature.aspx#Comments 0 http://www.metalcenternews.com/DesktopModules/DnnForge%20-%20NewsArticles/RssComments.aspx?TabID=5806&ModuleID=13936&ArticleID=6865 http://www.metalcenternews.com/DesktopModules/DnnForge%20-%20NewsArticles/Tracking/Trackback.aspx?ArticleID=6865&PortalID=51&TabID=5806 http://www.metalcenternews.com/Editorial/CurrentIssue/May2012/tabid/5806/articleType/ArticleView/articleId/6865/MCN-Feature.aspx Net Income Taxed In their first-quarter conference calls with analysts and investors, mill executives generally reported pressure on profitability as the year got under way. AK Steel Sales, Earnings Down in First Quarter AK Steel, West Chester, Ohio, reported a net loss of $11.8 million for the first quarter of 2012, compared to net income of $8.7 million for the first quarter of 2011 and a net loss of $193.9 million for the fourth quarter of 2011. Net sales for the first quarter topped $1.51 billion on shipments of 1,325,900 tons, down from sales of $1.58 billion on shipments of 1,423,100 tons for the year-ago first quarter. The company’s average selling price for the first quarter was $1,138 per ton, a 6 percent increase from the fourth quarter of 2011 and about 3 percent higher than the first quarter of 2011. The higher average selling price for first-quarter 2012 was primarily due to a richer product mix, increased contract sales and higher prices for certain products, company officials said. AK Steel reported an operating profit for the first quarter of $4.1 million or $3 per ton, compared to an operating profit of $19.5 million or $14 per ton for the first quarter of 2011 and an operating loss of $300.7 million or $213 per ton for the fourth quarter of 2011. “We continued to experience a slow, but steady, improvement in market conditions during the first quarter, which helped AK Steel achieve an operating profit,” said James L. Wainscott, chairman, president and CEO of AK Steel. The company ended the first quarter of 2012 with $42.3 million of cash and cash equivalents and $840.6 million of availability under the company’s revolving credit facility, for total liquidity of approximately $883 million. Looking ahead to the second quarter, AK officials said they expect to report positive net income, but declined to offer further guidance. Alcoa Earnings Up Over Previous Quarter, But Down vs. First-Quarter 2011 New York-based aluminum maker Alcoa returned to profitability in the first quarter, reporting income from continuing operations of $94 million during the first three months of 2012. That was an improvement of $287 million over the previous quarter. The gain over fourth-quarter results was driven by strong productivity improvements across all businesses, higher realized prices for aluminum, and improved volume and mix, company officials said. These factors were offset somewhat by a lower realized alumina price and higher input costs. Alcoa’s income in the quarter was down significantly, however, compared to the $309 million earned during first-quarter 2011. “Performance rebounded strongly this quarter due to our proactive cash sustainability actions, our relentless focus on profitable growth, and stabilizing markets,” said Klaus Kleinfeld, Alcoa chairman and CEO. “We are successfully executing on our aggressive strategy to move down the cost curve in our upstream businesses, and drive to record profitability in our midstream and downstream businesses. Challenges remain in this economy, but we approach them better prepared than ever before.” Alcoa recorded first-quarter 2012 revenue of $6.0 billion, up slightly compared to both fourth-quarter 2011 and first-quarter 2011. A 9 percent drop in the realized price of aluminum and a 13 percent drop in the realized price of alumina, year-on-year, were partially offset by higher third-party shipments in the upstream businesses, better volume and mix in the midstream business, and improved volume in the downstream business, the company said. Compared to the previous quarter, Alcoa recorded revenue growth in the first quarter across global end markets, including industrial products, up 14 percent; automotive, up 13 percent; packaging, up 11 percent; and commercial transportation, up 11 percent. Compared to first-quarter 2011, revenues were up 32 percent in commercial transportation, 15 percent in aerospace and 7 percent in automotive, but down 14 percent in industrial products and 5 percent in building and construction. Alcoa continues to project a global aluminum supply deficit in 2012 and reaffirmed its forecast that global aluminum demand would grow 7 percent in 2012, on top of the 10 percent growth seen in 2011. As previously announced, Alcoa is curtailing 390,000 metric tons of its system refining capacity to improve the company’s competitive position and to reflect updated internal demand following smelting curtailments announced earlier this year. Combined with the curtailments and closures of high-cost smelting capacity, the company said it will meet its previously stated goal of moving down the cost curve 10 percentage points in smelting and 7 percentage points in refining by 2015. In January of this year, Alcoa announced the closure or curtailment of 531,000 metric tons of smelting capacity. Of that, 291,000 represented the permanent closure of capacity in Tennessee and Texas that had been idled since 2009. Another 240,000 metric tons, or 5 percent of Alcoa’s smelting capacity, represented curtailments to be taken in Portovesme, Italy, and La Coruña and Aviles, Spain. Allegheny Technologies Earnings Flat on Higher Sales Allegheny Technologies Inc., Pittsburgh, reported net income of $56.2 million on sales of $1.35 billion in first-quarter 2012. Sales were up about 10 percent, and earnings about the same, compared to first-quarter 2011. Compared to fourth-quarter 2011, sales increased $101 million or 8 percent and net income increased $24.5 million or 77 percent. “The first quarter of 2012 was consistent with our expectations as strong secular growth continued in our key global markets and demand improved moderately from the domestic GDP-sensitive markets for our short-cycle products,” said Rich Harshman, chairman, president and CEO. ATI's sales to the key global markets of aerospace and defense, oil and gas/chemical process, electrical energy and medical represented 68 percent of first-quarter sales. In ATI’s High Performance Metals segment, sales increased 46 percent compared to first-quarter 2011 and 11 percent compared to fourth-quarter 2011. “Demand remained strong for our titanium and titanium alloys, nickel-based and specialty alloys, and forged and cast components. We continue to see significant profitable growth opportunities and operating benefits from the integration of ATI Ladish,” Harshman said. “Comments from our OEM customers regarding ATI's integrated supply chain capabilities have been positive, and we are seeing many new opportunities for sales to our key growth markets.” In ATI’s Flat-Rolled Products segment, demand for standard stainless products rebounded from the historically weak fourth quarter of 2011. While standard stainless volume improved by 29 percent from fourth-quarter 2011 and base-price increases were implemented, base prices remain relatively low primarily due to low-priced imports. Sales of high-value flat-rolled products benefited from continued strong demand from the aerospace and the oil and gas markets, but demand for grain-oriented electrical steel continued to be hurt by the weak housing construction market, said company officials. Construction of ATI’s new hot-rolling and processing facility is proceeding on schedule and should be commissioned in first-half 2014. “While uncertainties remain about the euro-zone debt crisis and the pace of GDP growth in the U.S. and China, ATI's diversification and focus on high-value global markets with strong secular growth gives us continued expectation of revenue growth of at least 10 percent in 2012 and segment operating profit in the range of 13 percent to 14 percent of sales,” Harshman said. Nucor Minimill Manages Through Mid-Quarter Trough Nucor Corp., Charlotte, N.C., reported net earnings of $145.1 million during the first quarter, an increase from the previous quarter but down from the same period in 2011. The minimill company reported net earnings of $137.1 million during the previous quarter and $159.8 million during last year’s first quarter. Nucor's consolidated net sales increased 5 percent to $5.07 billion, up from $4.83 billion in the first quarter of 2011, due to a 6 percent increase in the average sales price per ton, partially offset by a 1 percent decrease in total tons shipped to outside customers. During the company’s quarterly conference call, Chairman and CEO Dan DiMicco praised Nucor’s performance “in what Stanford economist Edward Lazear recently described as the worst economic recovery in history.” First-quarter downstream steel products shipments to outside customers increased 3 percent over the first quarter of 2011, but decreased 3 percent from the fourth quarter of 2011. The average scrap and scrap substitute cost per ton used during the first quarter was $445, an increase of 5 percent over the $424 cost in the first quarter of 2011, and an increase of 1 percent compared to the $441 cost in the fourth quarter of 2011. “We saw a dip around the middle of the first quarter. After the dip, we began to see volume and pricing recover,” said John Ferriola, Nucor’s president and chief operating officer. “Considering the current match between capacity and demand, it would seem both volume and pricing will stabilize in the near future.” Overall, operating rates at the company’s steel mills remained relatively flat in the first quarter at about 79 percent, as compared to 80 percent in the first quarter of 2011. The rate was up from the 71 percent in the previous quarter, however, and exceeded the North American average of 78 percent, company officials noted. Construction is continuing at Nucor’s 2.5-million-ton DRI facility in Louisiana. The majority of the equipment will arrive in 2012, and the facility is on schedule for start-up in mid-2013. Nucor will spend approximately $450 million on the DRI project in 2012, part of its estimated $1 billion in capital expenditures for the year. The cap ex budget is more than double the company’s spending in 2011. Nucor’s other major projects in 2012 include the new light and wide hot-mill stand at its Berkeley Co., S.C., operation. The company will be able to produce hot-band, pickled and oiled and cold-rolled at a finished width of 72 inches. It will supply the company’s automotive quality galvanizing line at its Decatur, Ala., facility with 72-inch coils. Additionally, vacuum tank degassers will be installed at its Hickman, Ark., and Hertford County, N.C., locations. In other action during the first quarter, Nucor’s David J. Joseph Co. subsidiary acquired three metal recycling companies that will expand its regional recycling platforms. These acquisitions will provide an additional annual capacity of around 275,000 tons. Among its end markets, Nucor believes the construction market, while still weak, has hit bottom. “While demand for non-residential construction markets remains at very depressed levels, we continue to believe the construction market has, at a minimum, stabilized. In fact, our rebar fabrication and custom engineered metal buildings businesses are seeing year-over-year increases in orders and in backlogs,” Ferriola said. Steel Dynamics SDI Shows Sequential Improvement Steel Dynamics Inc., Fort Wayne, Ind., reported net income of $46 million during the company’s first quarter. Income for the minimill company was down more than 50 percent from the same period of 2011, but up more than 50 percent from the previous quarter. “We were able to achieve sequential quarterly financial improvement in all of our major operating platforms during the first quarter,” said President and CEO Mark Millett during the company’s quarterly conference call. “The good news remains that demand in certain market sectors continues to be steady and flat-roll order entry has regained momentum from mid-quarter levels.” Although 2012 first-quarter net sales of $2.0 billion were consistent with those achieved in the prior-year first quarter, operating income decreased 42 percent. Margins decreased within the company's flat-roll steel and metals recycling operations. The average selling price per ton shipped for the company's steel operations in the first quarter was $875, a decrease of $15 per ton compared to the prior-year quarter. The average quarterly ferrous scrap cost per ton melted increased $18 for the same comparative period. First-quarter 2012 steel shipping volumes were generally flat, although the product mix differed significantly from first-quarter 2011 as flat-roll shipments decreased 107,200 tons and long products shipments increased. Gains from the company’s Structural and Rail division drove the 104,000-ton improvement in the long products segment. In addition, metals recycling and fabrication volumes improved. The declines in the flat-rolled segment were attributed to a mid-quarter dip in sales. Millett said the decline was not caused by weakening demand, but was “procurement driven through erratic buying behavior as consumers tried to time the market.” The flat-rolled market rebounded by quarter’s end. Despite decreased volumes, earnings from flat-roll operations increased 22 percent, as increases in selling prices in the beginning of the quarter were greater than corresponding increases in the cost of raw materials. Flat-roll earnings were nonetheless tempered by mid-quarter price reductions resulting from increased supply brought about by additional domestic flat-roll production capacity and increased import activity, company officials said. Nevertheless, in time Millett believes those two factors will be overcome. The new capacity will be absorbed as the U.S. ramps back up toward its normal annual steel demand of 120 million tons, and imports will be further hampered by more competitive domestic prices. In other segments, SDI experienced an unanticipated outage in the company’s Engineered Bar Division, resulting in a decrease in volumes of about 16,000 tons. However, maintenance work had already been planned for the facility in the second quarter, so the shipment loss was merely pulled forward to the first quarter. During the quarter, SDI announced plans to expand the SBQ offerings at its Pittsboro facility, making it one of the larger single-site SBQ facilities in North America. The company will grow special bar quality capacity by 52 percent to 975,000 tons. The expansion, expected to be complete by the second half of 2013, is focused on the addition of small-diameter SBQ products, serving some markets the company previously was unable to reach. “At a budget of $76 million, it's a very effective use of capital. Furthermore, it will consume about 250,000 tons of billets from our Columbia City structural mill, thereby diversifying their product mix and providing a good baseload to eliminate vagaries of the structural market,” Millett said. Looking ahead, Millett added: “Despite continued uncertainty within the U.S. and global economies, we believe there is the possibility for more stability to develop in 2012 as improvements continue in certain market sectors, such as energy, agriculture, automotive, transportation and construction equipment. Volumes should increase if our customers are correct in their prognostications, and with margins remaining as they are.” Timken Company Sees Record Sales in First Quarter The Timken Co., Canton, Ohio, reported record sales of $1.4 billion in the first quarter of 2012, an increase of 13 percent over the same period a year ago. The increase reflects stronger demand across most of the company's end markets, better pricing and product mix, and the impact of acquisitions. The company also generated record income in the first quarter of $155.7 million, up from $112.7 million during the same period a year ago. “Our record performance, as well as our confidence in our improved fullyear earnings outlook, stand as further testimony to the company's ability to execute at a structurally higher level of performance,” said James W. Griffith, Timken president and CEO. “Around the globe, our company is operating very well, leveraging momentum we see in our target markets, earning new business through our expanded product and services portfolio, and successfully driving those gains to the bottom line.” Among recent developments, the company broke ground on a $225 million expansion at its Faircrest Steel Plant in Canton, after securing a new five-year basic labor agreement with members of the United Steelworkers of America. Sales for Timken’s steel segment, including inter-segment sales, totaled $535.5 million in the first quarter, an increase of 11 percent from the same period last year. The results reflect increased pricing and favorable mix driven by strengthening demand in the oil and gas markets, partially offset by lower shipments to the industrial and mobile on-highway sectors. Raw-material surcharges increased approximately $5 million from the first quarter last year. Timken officials forecast sales growth of 7 to 10 percent overall in 2012, with Mobile Industries sales flat to up 5 percent; Process Industries sales up 10 to 15 percent; Aerospace and Defense sales up 10 to 15 percent; and Steel sales up 5 to 10 percent, driven largely by demand in the energy markets. U.S. Steel Loss Overshadows Improved Operating Results United States Steel Corp. Pittsburgh, reported a first-quarter 2012 net loss of $219 million, compared to a fourth-quarter 2011 net loss of $211 million and a first-quarter 2011 net loss of $86 million. Adjusted first-quarter 2012 net income was $110 million, including adjustments for a $399 million after-tax loss on the sale of U.S. Steel Serbia in January. “We reported a significant improvement in our operating results in the first quarter as compared to the fourth quarter, mainly driven by improved average realized prices and shipments for our Flat-rolled segment. Our Tubular segment had another strong performance reflecting the continued strength of oil-directed drilling. U.S. Steel Europe results improved, excluding the loss on the sale of U.S. Steel Serbia, but continue to reflect the challenging economic situation in the region,” said U.S. Steel Chairman and CEO John P. Surma. U.S. steel management believes segment income from operations is a key measure in evaluating company performance. U.S. Steel reported income from operations of $295 million or $52 per ton in the first quarter of 2012, compared with a loss of $26 million or $5 per ton in the fourth quarter of 2011 and income of $4 million or $1 per ton in the first quarter of 2011. Flat-rolled income from operations improved significantly from fourth-quarter 2011, primarily due to higher average realized prices and shipments resulting from improved end-user demand and some inventory replenishment by spot customers. First-quarter prices increased by $23 per ton to $764 due to higher average realized prices on both spot and contract business. Shipments increased by 8 percent to 4.1 million net tons, the highest shipping level since third-quarter 2008, the company said. Additionally, operating costs decreased in the first quarter as a result of operating efficiencies and reduced energy and facility maintenance costs. The raw steel capability utilization rate was 83 percent for the Flat-rolled segment, an increase from the fourth-quarter rate of 75 percent. Tubular first-quarter results improved from fourth-quarter 2011 as the demand for oil country tubular goods and line pipe remained strong. Shipments of 529,000 tons represented a record quarterly shipping level and an increase of 10 percent from fourth-quarter 2011. Average realized prices increased slightly to $1,727 per ton. “We expect all three of our operating segments to reflect positive results from operations with total segment results consistent with the first quarter,” said Surma, looking ahead to the second quarter. “Our European segment is expected to return to positive income from operations reflecting improved average realized prices. “Shipments and average realized prices for our Flat-rolled segment are expected to remain comparable to the first quarter as end-user demand remains stable and spot market inventories appear to be aligned with end user demand. “Second-quarter 2012 results for our Tubular segment should remain consistent with the solid performance achieved in each of the past three quarters. Average realized prices are expected to remain near first-quarter levels. Shipments are expected to remain strong, but slightly below the record levels of the first quarter. End-users continue to rebalance their inventory positions as oil-directed drilling continues to drive the rig count, while natural gas drilling is being negatively affected by high storage levels and low prices,” Surma said. Mon, 18 Jun 2012 18:03:00 GMT f1397696-738c-4295-afcd-943feb885714:6865