service centers
NSPS Metals installed three light-gauge coil processing lines: An Alcos slitter and two Red Bud Industries cut-to-length lines.
A little faith
Startup works with core customers and relies on vital supply chain relationships
By Corinna Petry

any highly entrepreneurial industrial companies understand that large capital investments may be tough to take on, and hard to justify, during downturns—such as a global pandemic that tanks the economy, for example. That’s because the return on investment that executives bank on during the planning stages may take much longer to realize.

NSPS Metals, which opened its $18.6 million, 130,000-square-foot service center in Houston in September, announced the mega project in late 2018 and broke ground in March 2019.

With its partners, Nippon Steel Trading Americas Inc. and Pacesetter Steel, Kennesaw, Georgia, “we succeeded,” says NSPS Metals President and CEO Takenori Nakano.

Since September, he says, “we completed installation of the machines and started up the machines—one slitting line and two blanking lines.”

Equipment specifications

One of the three lines NSPS Metals operates is an Alcos Machinery Inc. 72-inch-wide slitter that handles hot-rolled pickled and oiled, cold-rolled and galvanized steel with yield strengths of up to 80,000 psi. It will process material from 0.009 to 0.25 inch thick from coils weighing up to 30 tons.

There are two 72-inch-wide cut-to-length lines built by Red Bud Industries. The first accepts coils up to 25 tons with a maximum entry width of 75 inches and a maximum entry coil diameter of 84 inches. Stack lengths can range from 20 to 192 inches, and the maximum stack weight is 15,000 pounds. This first line manages material from 0.02 to 0.135 inch thick that has a rated tensile strength of 50,000 psi but could also cut material with a tensile strength of up to 95,000 psi. Equipped with a CNC slitting head, a 13-foot-deep looping pit and two Machine Concepts-built levelers, the line will run up to 250 feet per minute.

The second Red Bud line handles material from 0.013 to 0.075 inch thick from coils up to 25 tons. The coil entry width can be up to 72 inches with outer diameters from 30 to 65 inches. The maximum line speed is 120 feet per minute and sheet lengths can range from 20 to 192 inches. This line’s looping pit is 8 feet deep.

Market dynamics

Initial sales “are a little slow because we are so new to the market,” says Nakano. “But we have a core business—we are working with Pacesetter’s existing customer list. And we are developing new customers. We have a big space here to add many more orders.

“We are buying steel from North American producers. We like to support a good supply chain throughout Texas and over the border into Mexico,” he says. Nippon Steel Trading Americas is one of the investors “so they are sourcing from all over the area. With the tariffs, it is harder to bring in foreign steel.”

Nippon Steel Trading Americas subsidiaries include Kentucky Steel Center Inc., Berea, Kentucky, and Aguascalientes Steel Coil Center, S.A. de C.V., in Aguascalientes, Mexico, plus automotive parts manufacturing operations in Ohio and Mexico.

NSPS Metals expects to supply blanks and slit coils into the automotive supply chain in the future, among other end use markets.

The vast majority of the material sourced by NSPS Metals is from domestic producers.

Nakano is a veteran of the service center business. With Nippon Steel Trading, he managed “the service centers in Southeast Asia. Nippon Steel Trading has many service centers in Japan and many Asian countries.” He was part of a team that also started up service centers in Thailand.

“The United States used to be a great market for Asian steel mills,” Nakano says. “Since Section 232, it’s not as easy. From the Midwest down to the South, many Japanese trading companies and service centers slowed down trading. However, our new strategy is being located in Texas and selling domestic steel to domestic and Mexican customers.”

He says the business model between trading and service centers is “very much the same. We are connecting suppliers and the customers.”

domestic mlls are working hard to restart production capacity. some are catching up.
takenori nakano, nsps metals

According to Nakano, the metals supply chain did suffer a convulsion last year. “The coronavirus brought a slowdown to all the industries. Many automotive plants had shut down last spring. Then, due to this negative impact to the supply chain, [metals experienced] low operational rates.”

In the first quarter of 2021, “domestic mills are working hard to restart production capacity. Some are catching up. We look forward to a healthy cycle. In September, inventories had become low. Closing 2020, steel production was lower by 10 percent, so all the mills tried to recover production, but there was a gap.”

Nakano suggests that a new direction from governments (China and the U.S.) and perhaps a new trade balance between Asian producers and American metals consumers would be helpful. “But nobody knows how that will play out.”

In the meantime, the conundrum remains: “If tariffs would be lifted, more [foreign steel] will come in again. If the U.S. government keeps the tariffs, the domestic market may still be short supply.”

In its corner of the world, NSPS Metals will endeavor to “provide a smooth supply chain, matching materials to needs, offering the best quality,” Nakano says. “We propose that our service will achieve customers’ requirements, and we want to work with them to provide solutions for the future. We want to be able to attract all of our customer’s business and we also want to serve the steel mills that supply us.”

As turmoil from the pandemic subsides, “the market is abnormal. Neither the buy side nor the sell side is happy,” says Nakano, adding that the current high price environment is not sustainable. On the other hand, “we don’t want prices to drop sharply. Moderate is the best.”

NSPS Metals, Houston, 713/999-9201,