Steel Tariffs- HIGHER PRICES!

July 30, 2018

Prices for Hot Roll Steel Band in the US U.S. are $465 higher than in China (compared to $471 in the last report two weeks ago), and $358 higher than in the EU (compared to $372 in the last report).

$465 higher than China; $358 higher than EU.

Steel in the US is 76% more expensive than in China.

Steel in the US is 49% more expensive than in the EU.

How’s steel profits?

Steel Dynamics Joins Nucor – Doubling Profits.

The next time somebody says “National Security” I am seriously gonna lose my cool!

Section 232 tariffs are for national security.Yeah right.

 

Price information courtesy Steel Benchmarker.

Advertisements

Precision Machining Shops in High Gear in June 2018

July 25, 2018

“With 84 companies responding, the PMPA Business Trends Index for June 2018 held steady at 138, highest June on
record and tied with May 2018. The calendar year average remains 136. The 2018 June index of 138 is 2.2% higher
than June 2017’s 135 value. This is our Index’s highest value recorded for June, and is our second highest value ever
recorded (March 2018’s 143 was the highest ever).”- PMPA Business Trends Report- June 2018

2018 continues to set a blistering pace for the performance and sentiment indicators that we
track. June 2018 is now our second highest sales Index ever- tied with May 2018- while March 2018 was our all-time
high. Our forward- looking indicators remain strongly positive even as they reflect some softening from our current record
levels of performance. Our industry continues to outperform 5-year averages by a wide margin- ~10.4% for June!

See the full report here: https://www.pmpa.org/news/latest-news/2018/07/24/pmpa-business-trends-june-2018

 

Employment prospects are 98% positive In precision machining shops!

P.S- Employment Sentiment: Prospects for employment are positive and strengthening with ninety-eight percent (98%)
expecting level or increased opportunities for employment!

photo credit: Life of Dad blog

 


United States Department of Commerce Section 232 Exclusion Requests Tracking

July 11, 2018

In case you were wondering how well the US Department of Commerce is taking care of the exclusion requests by American Metalworking companies, here’s some data.

 

0ver 98.9% of all requests for exclusions remain unprocessed!

Requests for exclusions for both steel and aluminum have less than a half of a percent chance of being approved- 0.35% for steel and 0.47% for aluminum.

Where else but government is this level of performance tolerated?

We will update this from time to time.

 


Beryllium Standard Final Rule- Do You Machine Beryllium?

July 3, 2018

The 2017 final rule established new permissible exposure limits.

It also included provisions to protect employees from exposure to Beryllium, such as

  • requirements for exposure assessment,
  • methods for controlling exposure,
  • respiratory protection,
  • personal protective clothing and equipment,
  • housekeeping,
  • medical surveillance,
  • hazard communication,
  • recordkeeping 

Do you machine Beryllium in your shop?

Have you evaluated your compliance to the above 8 points of regulatory concern?

Do you know the key regulatory enforcement and compliance dates?

Beryllium Copper is not only used in electrical applications!

If your shop machines any of the following Beryllium Copper grades, it does apply to you:

Beryllium Coppers C17000, C17200, C17300, C17410, C17500, C17510

The rule applies to occupational exposure to Beryllium in all forms, compounds, and mixtures in
general industry, construction, and shipyards.

  • Employers that are covered under the rule must use engineering and work practice controls to
    keep exposures at or below the PELs.
  • Engineering controls include using process isolation, ventilated enclosures, or local
    exhaust ventilation to keep beryllium from being dispersed throughout a work area.
  •  Examples of work practices to control beryllium exposures include keeping surfaces
    clean by using a HEPA-filtered vacuum or by wetting down dust before sweeping it up.
  •  If engineering and work practice controls cannot keep exposures at or below the PEL,
    employers must provide respiratory protection to affected employees.

PMPA is providing members with sensemaking regarding this final rule, compliance dates and strategies, and helpful links to better understand their responsibilities.

PMPA Beryllium Final Rule Members Only

Photo of VR38 Nissan GTR Beryllium Copper Valve Seats courtesy of Fast Forward Race Engines on Facebook

Not a PMPA member? Contact Matthew  Hooper to learn more mhooper@pmpa.org

 

 


JUNE 2018 ISM PMI- Manufacturing Thrives Despite Tariffs and Trucking Challenges

July 2, 2018

Despite the uncertainty of the US Section 232 Tariffs on Steel and Aluminum, demonstrably higher steel prices, full employment, and trucking difficulties, US manufacturing is having a strong year, as evidenced by the June ISM PMI.

““The June PMI® registered 60.2 percent, an increase of 1.5 percentage points from the May reading of 58.7 percent… The Supplier Deliveries Index registered 68.2 percent, a 6.2 percentage point increase from the May reading of 62 percent… 

 “Demand remains strong, with the New Orders Index at 60 percent or above for the 14th straight month, and the Customers’ Inventories Index remaining low. The Backlog of Orders Index continued to expand, reading at 60 percent of higher for the third consecutive month. Consumption, described as production and employment, continues to expand in spite of labor, skill and material shortages.””- Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee

Manufacturing continues to thrive despite tariffs and trucking Issues according to ISM PMI for June 2018.

PMPA members have reported price increases for Steel and Aluminum as a result of the imposition of the Section 232 steel tariffs, with lead times for raw materials lengthening and growing more uncertain and base steel prices up by 20 percent since March.

Demonstrably higher steel prices…

Steel prices are at their highest level since the 2009 recession, and the difference between US prices and foreign steel prices are at a record differential  according to Steel Benchmarker.

Precision Machining Industry Sales in May second highest level on record. Our latest Business Trends Report for May 2018 showed our industry’s  sales at their second highest level ever. We remain strongly positive on outlook for our manufacturing industry, confirming the ISM PMI Report.

Second highest value ever- second only to the value for March 2018!

We continue to hear reports of issues in trucking industry, including loss of routine deliveries caused by the strict adoption of electronic logs and enforcement of driver time shortening the reach of mills for deliveries out of state.

There are more job openings than people to fill them according to the JOLTS report of the Bureau of Labor Statistics.

Manufacturing in Europe and China cooling. According to Reuters “Euro zone factory growth slowed to an 18-month low in June, slipping for the sixth month in a row amid widespread concerns about trade barriers and their impact on overall economic activity, a survey showed on Monday.”Euro zone factory growth slowed to an 18-month low in June.

“Growth in China’s manufacturing sector cooled slightly in June as firms faced rising input costs and a decline in export orders amid an escalating trade dispute with the United States, a private survey showed on Monday.” Growth in China manufacturing sector ebbs in June.

Bottom line:Despite the uncertainty, US manufacturing  is having a strong year, as evidenced by the June ISM PMI. This is in strong contrast to  pessimistic manufacturing activity readings from Europe and China which are not at all positive. And in spite of uncertainty and challenges we face from tariffs, trucking, employment, pricing and other issues.

ISM PMI June 2018 Announcement

Steel Benchmarker  Steel Price History

Graph Courtesy Calculated Risk Blog

PMPA Business Trends Report May 2018

Job Openings


PMPA Business Trends Index for MAY 2018- Second Highest Value EVER!

June 28, 2018

PMPA Business Trends Sales Index for May climbed to its second highest value ever as forward looking indicators for Sales, Lead Time, Employment and Profitability softened but remained positive.

Second only to the value for March 2018!

Our year to date average is 136, up 11 points or 8.8% over 2017’s year-end average of 125.

We are at 106% of where we were a year ago in May.

The FED reported that Industrial Production (IP) Industrial Production edged down 0.1 percent in May after rising
0.9 percent in April. Manufacturing production fell 0.7 percent in May, largely because truck assemblies were disrupted by
a major fire at a parts supplier. Excluding motor vehicles and parts, factory output moved down 0.2 percent.”

Our industry is clearly outperforming IP- they cannot make it until we produce the precision components needed.

The sentiment indicators while lower, still remain in positive territory, and are likely based on the realization that the summer is typically less demanding than the first quarter.

Full report available HERE


ISM PMI May 2018 at 58.7- Manufacturing Remains Solid

June 1, 2018

According to the just released Manufacturing ISM® Report On Business® “No industry reported a decrease in PMI® in May compared to April. Economic activity in the manufacturing sector expanded in May, and the overall economy grew for the 109th consecutive month; the May PMI® registered 58.7 percent, an increase of 1.4 percentage points from the April reading of 57.3 percent.” – Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. 

Here are the key points:

  • The May PMI® registered 58.7 percent, an increase of 1.4 percentage points from the April reading of 57.3 percent.
  • The New Orders Index registered 63.7 percent, an increase of 2.5 percentage points from the April reading of 61.2 percent.
  • The Production Index registered 61.5 percent, a 4.3 percentage point increase compared to the April reading of 57.2 percent.
  • The Employment Index registered 56.3 percent, an increase of 2.1 percentage points from the April reading of 54.2 percent. 
  • The Inventories Index registered 50.2 percent, a decrease of 2.7 percentage points from the April reading of 52.9 percent. 
  • Demand remains strong, with the New Orders Index at 60 or above for the 13th straight month, and the Customers’ Inventories Index remaining at very low levels.
  • The Backlog of Orders Index continued expanding, with its highest reading since April 2004, when it registered 66.5 percent.

Another solid month of manufacturing performance

Consumption, described as production and employment, continues to expand in the face of labor shortages,  skill shortages and both price and supply uncertainty on necessary material inputs, primarily driven by the Section 232 Tariffs.

Just as the national  anthem is a sign that the ball game is about to start, this ISM report is our signal that we need to start having price increase discussions with our customers.

The tariffs are here, and our inputs are all increasingly difficult to obtain and expensive.

 

Game on!

ISM PMI May 2018 

 

Calculated Risk Blog