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Manufacturers forecast ongoing stress with sourcing, logistics
Market volatility makes forecasting difficult
Big cutting capacity helps prioritize parts
October 2021
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The New Force In Coil Coating | Vorteqcoil.com
october 2021
trend publishing metals group Volume 77Number 09
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serving metal service centers, fabricators and OEM/end users since 1945
end user outlook 2022
‘All segments’ of the U.S. manufacturing economy struggle with commodity shortages, long lead times and high prices
Logo
serving metal service centers, fabricators and OEM/end users since 1945
Logo
serving metal service centers, fabricators and OEM/end users since 1945
end user outlook 2022
‘All segments’ of the U.S. manufacturing economy struggle with commodity shortages, long lead times and high prices
Container ship
Features
Metal plates
service centers
Tight supply, a labor shortage and market volatility prevent accurate forecasting
laser machine
laser technology
Large-format fiber laser has big cutting capacity that helps fabricator prioritize parts
Wood
material handling
Engineering a turnkey picking and restocking system creates a host of advantages for a busy warehouse
Wearhouse
coil processing
CTL line enables flat and dimensional sheets to be fabricated in small batches with minimum set-up time
Curve machine
sawing
Companies creating products using additive manufacturing techniques may still need sawing to post-process parts
MODERNMETALS.COM typography
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Online
Features
The Boonji Spaceman at Hodges Bay Resort & Spa, Antigua, “is a tribute to human ingenuity and resilience”
Growth puts tube producer on pace to log another successful year
Trusted suppliers, niche market and a transactional business model help one distributor navigate twists and turns
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Melted steel
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Green steel is a crucial part of our renewable future
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Corinna Petry headshot
From the Editor
By Corinna Petry
Adapt, grow
B

usiness media outlets often focus on the big players and how they perform during economic cycles. Big Tech, Big Pharma, Big Box retailers, etc. But the bread-and-butter portion of the manufacturing sector is often small to midsize companies with fewer than 50 employees. These include distributors, forging companies, processors, traders, fabricators and niche suppliers.

Umpqua Bank, based in Portland, Oregon, surveyed its mid-market business customers to produce a report about how those companies have fared through a global pandemic and how they are adapting.

“Umpqua’s latest national survey captures how [small and middle-market] companies have transformed … in the face of unprecedented challenges. It finds they are emerging more prepared. They’ve embraced the reality of disruption as the new normal and the need for continuous evolution as vital to success,” the bank’s report, based on its survey, states. Companies are “more efficient and more nimble, which will make them better prepared to adapt to the next disruption.”

HOT SHEET
Factory worker using heavy
Capital project
Extruder to boost capacity in $101.7 million expansion
Service Center Metals (SCM), which makes aluminum products, will invest more than $100 million to build two facilities: an aluminum extrusion plant and a Compact Remelt plant in Prince George, Virginia. The facilities will increase production capacity to meet growing demand from end users.

Founded in 2002, Service Center Metals began operating in Virginia in 2003. It produces aluminum billets, rods, bars, extruded shapes and tubing, all of which are shipped to service centers across the United States. The company is vertically integrated with two plants on its 30-acre campus.

end user outlook 2022
Surveyed by ISM, a purchasing manager in the metal fabrication sector reported being unable to hire hourly personnel or machine operators due to few applicants.
Demand
Exceeds Supply
Demand
Exceeds Supply
Demand
Exceeds Supply
// ‘All segments’ of the U.S. manufacturing economy struggle with commodity shortages, long lead times and high prices
By Corinna Petry
I

t is rarely the case but manufacturers are talking about an “upside-down world” where multiple price increases are accepted because the material they need is far more valuable to them than ever before. Shortages in labor, port berths, trucks, semiconductors, resins, steel and other resources have not allowed manufacturers to take their production rates to the next level or to keep much inventory for a rainy day. It’s been “raining” for months.

The purchasing managers index (PMI) for manufacturing registered 59.9 percent in August, up slightly from July’s reading, indicating a small expansion in the overall economy for the 15th month in a row, after shrinking in April 2020.

end user outlook 2022
Appliance
Washer
Lowe’s research shows it will take years for housing stock to meet demand—a positive indicator for home improvement. Photo: Samsung
Nesting trend // Consumers eager to expand share of wallet for a well-appointed home
Housing starts in July, at 141,000 units (not seasonally adjusted), were down from both May and June totals but improved from July 2020, according to the U.S. Department of Housing and Urban Development. The number of housing units completed during July totaled 121,500, the highest level over the previous seven months and well above the 117,100 units completed a year earlier.

Existing home sales during July rose 2 percent from June (seasonally adjusted) and 1.5 percent from a year earlier, according to the National Association of Realtors.

end user outlook 2022
Aerospace
airplane under construction
Photo: Airbus, S. Verger
Grounded in reality // Commercial flying is increasing dramatically, but airframe build rates are lagging significantly
Although the global pandemic ran through the airline industry like fire through tissue paper, people cannot be kept out of the skies. Business and leisure passengers are clamoring to fly more frequently again. Metals companies heavily involved in supplying the airframe builders have discussed the potential for recovery.

At aluminum producer Arconic Corp., CEO Timothy D. Myers told shareholders that “while it remains the biggest question mark in our portfolio,” he believes that decisions about increasing build rates “boils down to timing. We fully expect the industry to return to pre-pandemic levels and are encouraged by indicators in the market.

end user outlook 2022
AUTOMOTIVE
Man working on the Ford Bronco
Photo: Ford Motor Co.
Lagging effects // Supply chain disruption ‘benefits no one’
U.S. sales in August of light vehicles “continued to feel the inventory pinch,” according to Chris Hopson, manager for North American light vehicle forecasts at IHS Markit, a Boston-based consultancy. A total unadjusted sales volume level of 1.1 million units for August is the lowest monthly total since January 2021.

“Inventory constraints are expected to limit any upside potential to U.S. auto demand levels through the rest of 2021, with little recovery expected even in the first half of 2022,” Hopson predicts.

“U.S. light vehicle sales are constrained by inventory more than any time in recent memory, and the situation is likely to continue to be difficult,” says Stephanie Brinley, principal automotive analyst at the firm.

end user outlook 2022
Construction
STABILITY SOUGHT // Supply constraints have not tempered demand for machinery, raw materials

ALTHOUGH SOARING PRICES and material shortages have caused strain for builders, makers of construction equipment are hoping for greater stability in the mid- to long-term, especially if and when the pandemic eases and state and local infrastructure projects get started in earnest, with the help of federal intervention.

The Association for Equipment Manufacturers (AEM) released a recent report on the prospects for growth in demand for construction machinery. Considering that fiscal stimulus already played a pivotal role in helping the U.S. economy recover, the group notes that additional proposals carry “a lot of potential” for the construction sector.

“We’ve included the American Jobs Plan (AJP) in our economic forecast,” says Mark Killion, director of U.S. industry at Oxford Economics. “There is a big infrastructure component to the [plan] that could offer a lot of fuel for growth.”

end user outlook 2022
Energy
Gradual recovery: Improvements in oil, gas and electricity demand expected to continue
Gradual recovery // Improvements in oil, gas and electricity demand expected to continue

The number of rotary petroleum rigs operating in the United States as of Sept. 10 totaled 503, up 6 units from the week before and jumping by 249 units from the same week in September 2020, according to Baker Hughes. The number of operating rigs in Canada fell by 9 units from Sept. 3 to 10, but the rig count is still up by 91 units compared with the same week of 2020.

U.S. gasoline consumption averaged 8.6 million barrels per day (b/d) during the first half of 2021, up from 8.3 million b/d in the same six months of last year, but below the 9.3 million b/d in the second half of 2019, according to the U.S. Energy Information Administration (EIA).

end user outlook 2022
Transportation
transportation semi truck
Shipping woes // Container ships stalled, freight volumes pinched by supply chain bottlenecks
The ports of Los Angeles and Long Beach in California, in late August, reported that 39 ships lay idle within sight of the port.

Delays have been commonplace in recent weeks and months, owing to stronger import demand into North America amid drawdowns in warehouse stocks for many retailers, according to S&P Research. The delays have been exacerbated by logistical challenges such as port closures in China and escalating intermodal tie-ups in the U.S.

Recently, U.S. rail providers have metered or halted intermodal rail traffic in order to correct terminal congestion, particularly in the Midwest, resulting in drawn-out container dwell times.

Service Centers
Alliance Steel factory
Limiting factors
Tight supply, a labor shortage and market volatility prevent accurate forecasting
By Corinna Petry
A

lliance Steel LLC relocated its main plant and expanded during the 2020 portion of the ongoing global health crisis and continues to win new business, despite working within a market that is no longer predictable.

“It has been 18 months of craziness” in terms of how the steel market has reacted through the pandemic, says Alliance Steel’s Drew Gross, vice president-commercial.

Although Gross and his team continuously assess the steel environment, after this experience, they “gave up on definitive statements. Everyone has been wrong, from 30-year steel veterans to purchasing executives to analysts. This thing outlasted expectations. The way the market moved was just insane.

Laser Technology
LVD’s Taurus fiber laser machine

LVD’s Taurus is a large-format gantry-style fiber laser machine engineered for extra-large cutting capacity.

XXL

Large-format fiber laser has big cutting capacity that helps fabricator prioritize parts

By Lauren Duensing
O

cala, Florida-based contract manufacturer OFAB Inc., has been humming along since 1984 and has served the fire and emergency vehicle industries since 1988, providing services from laser cutting to finishing. OFAB also fabricates and machines parts for the mining, engine distribution, military and agriculture sectors.

“When we first started with laser cutting, they were rare machines,” says Mike Klinkroth, manufacturing manager. “Most cutting work was being done with plasma. We [owned] the first laser in our area, and selling laser work on a 5-foot by 10-foot cutting bed was pretty easy. Now, as lasers have become a mainstream piece of equipment, customers expect their parts will be cut with lasers.”

Material Handling

Ebb & flow

Engineering a turnkey picking and restocking system creates a host of advantages for a busy warehouse

By Corinna Petry

the Hubtex sideloader sits between two close aisles
The Hubtex sideloader is engineered for picking metal stock within high-density, tall, narrow aisles.
By Corinna Petry
P

acific Steel & Recycling, based in Great Falls, Montana, has 46 locations from the Northern Plains and Alberta, Canada, to the Rocky Mountains, Nevada and Pacific Northwest. Employee owned and operated, it has been on a path of steady growth for the past 25 years.

Stan Sears, general manager for the company’s Nampa, Idaho, branch, says, “The Boise market has been expanding over the last 10 years, and we hadn’t done any upgrades until the past year. We’ve gained over 30 percent more tons annually during that period and are really trying to meet the demand to move more tons every day.”

COIL PROCESSING

Gentle treatment

CTL line enables flat and dimensional sheets to be fabricated in small batches with minimum set-up time
BY LUTZ-STEFAN HEINRICH, SCHNUTZ GmbH
S

ystems for the packaging of master coils, small coils, slit strips and sheets must meet differing requirements depending on the material. The finishing format as well as the number of pieces, size, thickness and possible coating also play a role. They may require, for example, particularly gentle handling of very sensitive surfaces, compliance with short set-up times or handling partial coils.

Sawing
sawing Machine
Learning Curve
Companies creating products using additive manufacturing techniques may still need sawing to post-process parts
By UWE ENGELHARDT AND FRANK GRESENS, WIKUS
E

very company approaches transition in a different way: Wait and see or get involved early and become a trendsetter.

Once metals fabricators or manufacturers decide to invest in the future, they will soon find that sawing has a holistic influence on the production chain and that using the correct sawing tool ensures quality and process stability.

Additive processes represent an important technology in the production process for high-performance industries now and in the future. 3D printing is becoming increasingly efficient and is moving away from its original niche status. It is now worthwhile to test the technology and its applications and learn what it can do.

New Products
TUBE & PIPE
Pipe beveler focused on super alloys
The Prepzilla MillHog ID clamping pipe beveler is a self-centering unit with a range of up to 1.575-inch inner diameter to 8.625 inches outer diameter. The unit has one mandrel and eight sets of interchangeable clamps. Featuring dual-opposed tapered roller bearings and heat-treated and hardened clamping, cutting and operating components, this welding end prep tool provides enough torque behind the blade to get under super duplex stainless steel, P-51 and other super alloys.

Esco Tool, Holliston, Massachusetts, 800/343-6926, escotool.com.

PARTING SHOT
Ferrum 1
St. Petersburg, Russia
Ferrum 1 is one of several buildings that architect Sergei Tchoban’s Germany-based studio, Tchoban Voss Architekten, has designed for the site of the former Rossiya factory in St. Petersburg’s Polustrovo district. The name of the office building is the Latin word for iron. The name references the Cor-Ten steel façade as well as the history of the former industrial site on which the structure was erected. The sculptural façade is constructed in a geometric grid and presents itself as a coherent, dynamic, organically flowing fabric of loose “warp and weft” threads. The building is crowned by a band of golden aluminum panels, whose sheen visually offsets the intense coloring of the main façade cladding. “Rust on the outside, gold on the inside” is Ferrum’s central design theme.
Photo: Jaramay Aréf Photography
PARTING SHOT
Ferrum 1
St. Petersburg, Russia
Ferrum 1 is one of several buildings that architect Sergei Tchoban’s Germany-based studio, Tchoban Voss Architekten, has designed for the site of the former Rossiya factory in St. Petersburg’s Polustrovo district. The name of the office building is the Latin word for iron. The name references the Cor-Ten steel façade as well as the history of the former industrial site on which the structure was erected. The sculptural façade is constructed in a geometric grid and presents itself as a coherent, dynamic, organically flowing fabric of loose “warp and weft” threads. The building is crowned by a band of golden aluminum panels, whose sheen visually offsets the intense coloring of the main façade cladding. “Rust on the outside, gold on the inside” is Ferrum’s central design theme.
Photo: Ilya Ivanov
ModernMetals
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Lynn Stanley
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Contributing Editor
Lauren Duensing
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Modern Metals® (ISSN 0026-8127, USPS 357-640) October 2021, Vol. 77, No. 9 is a registered trademark of Trend Publishing Inc. Modern Metals® is published 11 times a year by Trend Publishing Inc., with its publishing office lo­cated at 123 W. Madison St., Suite 950, Chicago, Illinois 60602, 312/654-2300; fax 312/654-2323. Michael J. D’Alexander, President, Trend Publishing Inc. Copyright 2020 by Trend Publishing Inc. All rights reserved under the United States, International, and Pan-American Copyright Conventions. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means—mechanical, photocopying, electronic recording or otherwise—without the prior written permission of Trend Publishing Inc. This publication is sent free of charge to qualified subscribers. Single copies $14. Paid subscriptions in the U.S. $125/year. Canada, $145/year. Foreign subscriptions, $180/year surface mail and $260/year air mail. If interested in a free subscription go to www.modernmetals.com to see if you qualify. Periodicals postage paid at Chicago and additional mailing offices. POSTMASTER: Send address changes to Modern Metals® c/o Creative Data Services, Inc., 440 Quadrangle Drive Suite E, Bolingbrook, IL 60440. Printed in the USA.
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