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Expanded and Perforated

The Search for Steel

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MCN Editor Dan Markham Availability remains the primary concern of the expanded and perforated metals supply chain, which is in the middle of a solid bounce back year.

The entire metals supply chain is faced with a conundrum only ancient Greek philosophers, or perhaps Yogi Berra, could solve.

“If we don’t get metal, we can’t put holes in it,” succinctly sums Bob Colombi, the vice president of sales and business development for Ferguson Perforating Co., Providence, R.I.

The market for metal with holes, whether that’s expanded or perforated or wire mesh, is in great shape in 2021. But securing that material in this unusual steel environment remains the most challenging part of the business.

Manufacturers and distributors of metal with holes all cite availability as the most pressing aspect of the job, even more than the staggering price increases that have dominated the metals world for the past eight months.

“Price isn’t the issue; it’s actually can you get the material,” says John Holliday, sales manager for Accurate Alloys, Irwindale, Calif. “That’s the biggest concern going forward this year.”

Participants in the supply chain have no choice but to exhibit patience. “We’re planning for longer lead times. We don’t have shortages right now, but we have to plan much further ahead,” says Rick Bahner, president of Expanded Solutions, Oklahoma City. “There are risks of outages.”

For larger companies, having a broad network of affiliates does help defend against the situation. “We use a lot of our sister divisions when we can,” Ferguson’s Colombi says. John Farley, senior vice president and COO of Tampa, Fla.-based McNichols, has a similar story. “Because of our 19 locations, if we don’t have it at one particular location, we can get it from somewhere else. That keeps them whole on their material needs.”

While availability may be the main concern, the price is still a strong No. 2, particularly in a long lead-time environment.

“The biggest concern on everyone’s mind is when do prices come down, and how quickly do they come down,” says Mike Gilboy, president of Spantek Expanded Metal, which operates facilities in Hopkins, Minn., and Lincolnton, N.C. “We’re careful not to carry too much inventory for that reason.”

Passing down the price increases is imperative, but not without pain.

“It causes two disruptions,” he says. “It strains relationships with customers, and it requires a lot of monitoring of inventory and repricing everything multiple times. It’s time consuming and it takes away from other priorities.”

Holliday notes how the ever-changing price increases for the base metals, whether that’s steel, aluminum or stainless, make negotiating with customers more difficult. “A quote is good for 24 hours,” he says. “It’s difficult for us, and for a lot of our customers, it’s difficult to understand.”

For Ferguson, the price and availability concerns have had a bright side – a few more inquiries. “We’ve had some opportunities because some of our competitors couldn’t get metal or because they reduced the staff or because people are shopping the market. People who were used to paying a buck and are now paying a buck-50 have to go see if that’s the right number.”  

Also aiding the industry somewhat is the fact price hikes have become a way of life in so many materials. That’s particularly helpful for a segment that regularly must contend with the possibility of product substitution.

“It’s interesting [material cost inflation] started with steel, went to aluminum, then stainless, and now it’s even fiberglass, and there’s a flat-out shortage of resins,” says Farley. “It’s not easy to transition from one commodity type or material to another, because all of them are under duress from a price escalation standpoint.”

Plastics are a notable exception, Gilboy says. “Plastics look like a pretty good option these days. It replaces steel in many applications, and when the price of steel triples, it makes non-metallic options more viable.”

Of course, there’s another, equally valid option: rethinking the project entirely. And that is taking place in some areas.

“The decision is not whether to go with expanded or perforated or woven wire; it’s whether to build the project or not. It’s a go/no go decision, and I think expanded metals, like other metals, are caught up in that decision,” Bahner says.

Farley notes the price escalation causes project managers to recalibrate the price of the metal into the project, which may require revisiting the entire budgetary process. “It’s causing inflationary effects for projects, and even things manufactured. They have to evaluate as far as resale prices and acceptable margins before they can move forward.”

Girding against the dual concerns of pricing and availability is a generally strong market for the products, one that began to take shape early in the pandemic. While the shutdown orders in the second quarter curtailed activity in all end markets, the ramp back up was quick in most segments.

“During the crisis, we had more demand geared toward service industries – cleaning, medical and other industries that stayed open full bore,” says Holliday.

Now, it’s across the board.” He points to the restaurant business his company serves as an example of one that took longer to regain its footing, but is now taking off.

Farley says McNichols saw the change for the better take hold in October. “It was certain end markets that we keep an eye on that were starting to improve. Some of our channels were starting to pick up, and the indexes as well,” he says. “And I’d be underestimating to say it escalated in Q1. I don’t think many people anticipated the breadth and velocity where markets would go.”

Colombi echoed that sentiment. “When January started, it’s been like gangbusters.” While building and construction and general industrial rebounded in 2020, Ferguson is already seeing some resumption of activity in aerospace and oil and gas, albeit growth from very low levels.  

Metals with holes are used in a variety of industries, taking advantage of their unique properties, such as filtration or conductivity. “I’m amazed at some of the applications where it’s being used,” says Colombi.

The traits that demand their application in industrial usage also contribute to their value from architects. But that’s not the only reason designers are increasingly choosing expanded and perforated metals for building projects. The metals help with sound absorption, which can be extremely useful in certain projects. On top of that, one aspect of the material that makes it particularly popular with builders is the aesthetic appeal and the many ways that can be taken advantage of.

Another market the expanded metals industry has pursued, led by its trade group the Expanded Metals Manufacturing Association, is security. A push that began with September 11, 2001 received another boost this past January, following the breach of the U.S. Capitol.

“We’ve been focusing on security and fencing and enclosure applications. I’ll point to the Washington, D.C. security needs,” says Gilboy of the barriers that were constructed after Jan. 6. “Many of the images feature expanded metal fencing around the Capitol. That’s not by mistake. It’s cost-effective, it’s easy to erect and it’s much more secure than conventional chain link.”

Finding new markets is the eternal quest for the industry. Farley says McNichols is actively engaged in that process, with engineers working across industries to sell others on the benefits of metals with holes.

“There are things being created that aren’t using our products yet, but we want to be on the front end of design or application of that. We have separate teams here where that’s their focus, working with architects or manufacturing engineers, so we can tell them the benefits of expanded or perforated metals, whether that’s stainless or aluminum or carbon in various applications.”
And he remains bullish the industry participants will be able to continue to sell the materials to the relevant parties.

“[The products] offer tremendous flexibility to people who need something lighter weight or with better filtration or airflow through it. And on the architectural side, you never know when architects are looking for that next look, and that’s where expanded and perforated offer a lot of options,” he says.

Perforated metals create an interesting look on a walkway at the Sugar Creek Station in Charlotte, N.C.  (Photo courtesy McNichols.)