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.

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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


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


In Like A Lion- March Business Trends Index Sets New Record

April 27, 2018

With 91 companies responding, the PMPA Business Trends Index for March 2018 increased 14 points or 10.8% over
February to 143, the highest value for the Business Trends Index EVER! At 143, the index is up 11.2 points or 8.5%
above the five-year average for the March sales index of 131.8. ”  – PMPA March 2018 Business Trends Report

All time high for Our Sales Index!

Sentiment indicators from our respondents remained high. PMPA members can get the full report here. Press can request a copy  – we’ll be happy to share.

Two of three months  in 2018 have set new records for sales. Our industry is outperforming five year averages by wide margins- up 8.5% for March.

Prospects for employment remain high in our shops, even as the national figures tout “full employment.”

If you know someone that is underemployed, or unemployed, the prospects for great careers in our precision manufacturing shops have really never looked better.

 

Lion

March 2018 PMPA Business Trends Report

Great Careers


January Sales Record for Precision Machining

February 22, 2018

The PMPA Business Trends Index for January 2018 jumped to 135, up 25% over December 2017, and up 5% over January 2017. This is up 8.9% over the five year average for January Sales, and is our highest January on record.

January Sales Index up 25% over December, up 8.9% over 5-year January Average

Change your thinking to thrive to this new market.

Cheap inputs that cost your shop capacity are no bargain, when there are no shops scheduling less than 40 hours and 71% of shops are scheduling overtime.  It is all about UPTIME in this current market. There are no bargains worth having that cost you uptime.  And that means training your people is essential as well.

What we are hearing “falling behind…exceeded forecast by 10%…Can’t get it out quick enough…Picking which jobs to run…” Almost three quarters of shops reporting (74.3%) reported sales increases up by ten percent or more in January.

 The Fed reported that Industrial Production (IP) “edged down 0.1 percent in January following four consecutive monthly increases. Manufacturing production was unchanged in January.” Our industry is clearly a leading indicator for IP- they cannot make it until we produce the precision components needed.

Last January we said that “…the animal spirits have escaped confinement and are driving the manufacturing economy to performance not seen in years.” Last month we reported that industry sales “were up 6.8% for the year, a multiple of GDP growth. 

This report for January 2018 shows that our responding shops are outperforming the five-year shipments average for the month of January by almost 9%.

Our Lead Time indicator suggests that some shops are starting to think about capacity constraints.  Strong sentiment for profitability tells me that no one is “buying” business by cutting margins. Our Employment indicator recognizes that to continue production at these levels, we need to add talent.  Our performance and sentiment indicators this month justify our optimism about the markets and employment prospects for our precision machining industry in this New Year.

It is all about UPTIME in this current market. Cheap inputs that cost your shop capacity are no bargain. Change your thinking to thrive to this new market.

PMPA January 2018 Business Trends Report

Fed  January 2018 Industrial Production Report


December ISM PMI Increased In December!

January 3, 2018

A very strong report for Manufacturing in December according to the ISM PMI.

“The December PMI® registered 59.7 percent, an increase of 1.5 percentage points from the November reading of 58.2 percent. The New Orders Index registered 69.4 percent, an increase of 5.4 percentage points from the November reading of 64 percent. The Production Index registered 65.8 percent, a 1.9 percentage point increase compared to the November reading of 63.9 percent. The Employment Index registered 57 percent, a decrease of 2.7 percentage points from the November reading of 59.7 percent. The Supplier Deliveries Index registered 57.9 percent, a 1.4 percentage point increase from the November reading of 56.5 percent. The Inventories Index registered 48.5 percent, an increase of 1.5 percentage points from the November reading of 47 percent. The Prices Index registered 69 percent in December, a 3.5 percentage point increase from the November reading of 65.5 percent, indicating higher raw materials prices for the 22nd consecutive month. Comments from the panel reflect expanding business conditions, with new orders and production leading gains...”- Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee

So much for Seasonality! So much for Q4 Slowdown!

A very strong showing for December!

The December 2017 value is up 5 points or 10% from last December’s reported value.

We continue to find multiple positive indicators for manufacturing strength.

If you are sitting on the sidelines in today’s economy, we respectfully suggest that you bring your talent to manufacturing.

PMPA’s latest Business Trends Report showed that sentiment in our shops for Employment was quite positive and strong:

Employment: Ninety-seven percent of respondents expect employment prospects to remain the same or
increase in our industry over the next three months-despite seasonal factors! Our industry continues to hold
very positive prospects for employment.”

Chart courtesy Calculated Risk Blog

Institute for Supply Management PMI December 2017 Press Release