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The parking structure at St. Barnabas Medical Center in Livingston, N.J., uses expanded metal to achieve a distinct architectural style. (Courtesy Spantek Expanded Metal)

Markets Expand for Metals with Holes

Growing demand for expanded and perforated metals is bolstering short-term outlook

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It’s been a solid start to the year for expanded and perforated metal. Markets are strong, supply is steady, and makers and distributors of metal with holes are relatively optimistic.

Mike Gilboy is the chairman of the Expanded Metals Manufacturers Association, and he says the market for expanded metal began picking up in the second half of 2017 – a trend he expects to continue. “Now into 2018, the market is very strong,” Gilboy says. “I think that’s because of generally improved economic conditions and manufacturing activity. It’s a fairly wide-range industrial utility product, and it’s used in so many different industries that we generally follow the economy pretty closely.”

Keith Mailloux, president of the Industrial Perforators Association, says the same is true for perforated metal. “As an industry we have seen an uptick in our order volume across nearly all industries,” he says. “Early 2018 figures indicate a growth in the industry of approximately 12 percent.”

Part of the reason for the optimism among manufacturers and distributors of expanded and perforated metals is the products’ growing use in the security fencing and architectural markets. 

“In terms of new applications and opportunities, our main focus as an association right now is in promoting the product for use in architectural applications and also security fencing and enclosures,” says Gilboy, who notes that this type of promotions is a primary goal EMMA. “These are two markets we believe have a lot of growth potential for us.”

Rick Bahner, owner of Oklahoma City-based manufacturer Expanded Solutions, says security fencing is among the biggest factors driving the expanded metal industry. “There’s a move toward high security, and expanded metal provides a level of high security that other products just don’t provide,” he explains. “There will be a lot of fencing that replaces chain-link that will be made out of expanded metal for a number of years to come. I think there will also be a lot of areas that were relatively unprotected, like reservoirs, that will become protected in the future.”

Bahner, who is also a past chairman of EMMA, said the future looks bright for architectural applications as well. “I think the architectural products market will grow as more and more people become aware of the aesthetics of expanded metal,” he says, adding that the metal’s light diffusion properties help prevent solar heat gain, as well as enhance the visual appeal of artificial light. “It’s truly a wonderful product to look at, and I think that market will grow.”

One of the most significant potential uses of expanded metal in the architectural market is building envelopes. Gilboy notes that the trend of using metal skins on buildings is prominent in Europe, and he believes that U.S. developers are starting to follow suit. “Expanded metal provides excellent shading opportunities, provides dramatic appearances, and provides some buildings cooling and heating control through shading,” he says.

Aside from security and architecture, expanded and perforated metals are common in a wide variety of industrial and commercial markets. “If you start looking for it, you’ll see it almost everywhere,” says Sally Clark, president of Clark Perforating Co., Milan, Mich.

The main differences between expanded and perforated metal are the ways in which they are manufactured, the potential amount of open area and cost. Because expanded metal is a material that is pierced and stretched, there is little to no scrap produced in the manufacturing process, making it less expensive than perforated metal. On the other hand, perforated metal typically allows more options regarding thicknesses and hole size, according to John Farley, senior vice president and chief operating officer at McNichols Co., Tampa, Fla.

Despite these differences, both types of metal are used for air and liquid filtration, machine guarding, and an array of other industrial and transportation-related applications.

According to Farley, many of these end markets are meeting or exceeding expectations. “Quite frankly, markets are good,” he says. “If you know your customers really well and you understand the economic influences driving them, you should be able to position your company well. It’s just simple stuff.”

His company, McNichols, is among the largest domestic distributors of metal with holes, making it a good barometer for how the expanded and perforated metals markets are performing overall. As a master distributor, McNichols has seen its distribution business pickup. “A big part of our business is the distributors, and we’ve certainly seen improvement in that area,” Farley says.

Mailloux, who is also vice president of operations and chief information officer at Ferguson Perforating Inc., Providence, R.I., says perforated metal is experiencing growth in nearly all market segments. “Based upon early results and forecasted figures, it appears the fiscal policies and incentives that have been put in place in the U.S. have stimulated the manufacturing industry,” he says.

As for specific applications, the major end markets for expanded and perforated metal are moving in the right direction. The construction industry, one of the largest consumers of these metals, has been very active, according to Farley, who notes that the Architecture Billings Index has reported expansion in that sector each of the first four months of 2018. Similarly, he says other economic indicators suggest that business is picking up for companies that manufacture equipment in the construction, transportation, agricultural and energy industries. 

“We came into this year with some very optimistic forecasts, but even beyond 232 there’s some really good market demand out there that I think will translate to a good second half of 2018,” Farley says, noting that tariffs on steel and aluminum could potentially create some supply-side issues. “There could be some challenges going forward if there’s a lack of imports coming in. When we get some more clarity on the 232, I think that will certainly address some of those concerns.”

Gilboy, who is also president of Hopkins, Minn.-based Spantek Expanded Metal, thinks the tariffs and their potential global impact is a major “unknown” factor in the industry. So far, he says the biggest effect of Section 232 has been added cost.

“That cost increase is being created by the mills and passed onto processors like expanded metals manufacturers, who have to pass it onto their customers,” Gilboy says. “That will provide an incentive to bring finished fabricated products in from offshores, as opposed to raw materials. That’s our fear for the industry.”

In response to those concerns, the National Association of Architectural Metal Manufacturers – the parent organization of EMMA – is reaching out to legislators directly. “NAAMM is going to draft a letter for all association members to send to their representatives appealing to them so that they understand the downstream impact this has on a much larger base of manufacturing than just steel mills,” Gilboy says. 

“The consumers of steel employ about 10 times the number of people in North America that steel production does,” he adds. “The tariffs are intended to protect and enhance the performance of steel producers, but it’s really hurting steel consumers and processors.”

Despite this, the general mood is still positive among manufacturers and distributors of expanded and perforated metal, Gilboy included. “The general economy and manufacturing outlook is fairly strong throughout this year and next year,” he says.

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