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ASA MATERIALS MARKET DIGEST March, 2014 • Jim Olsztynski, Editor • Published monthly by the American Supply Association • www.asa.net • info@asa.net • 630.467.0000
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This report is published as a member service of the American Supply Association. Its contents are solely for informational purposes, and any use thereof or reliance thereon is at the sole and independent discretion and responsibility of the reader. While the information contained in this report is believed to be accurate as of the date of publication, ASA and the author disclaim any and all warranties, express or implied, as to its accuracy and completeness. © 2014 American Supply Association. All Rights Reserved.
© 2014 American Supply Association. All Rights Reserved.
ASA MATERIALS MARKET DIGEST
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3D Printing of Metals Close to Reality So far, 3D printing has been limited to plastics, but a prototype of a machine that appeared at the Maker Faire New York 2013 features a small, onboard furnace that heats metal until it is liquid. The printer then uses magnetism to draw the material out onto the printer bed. When a digital file is sent to the machine, it prints out tiny blobs of metal in the desired location in much the same way as an inkjet printer does with ink on paper. The manufacturer, Vader Systems, is a father-and-son company that hopes to bring the final product to market in the U.S. sometime in 2014 at a selling price of around $10,000.
steel production advanced from 683 million tons to 1.53 billion tons in that period, according to the World Steel Association’s (WSA) chief economist and director of economic affairs, Nae Hee Han.
Stainless Steel All four of North America’s four major stainless producers – AK, ATI, Outokumpu and NAS – raised March extras across the 300 grades, thanks to higher nickel prices. Non-nickel 400 grades moved lower in a weak ferrous market.
Carbon Steel U.S. steel mill shipments decreased 0.5 percent in 2013, according to the American Iron and Steel Institute (AISI). U.S. service center steel shipments in January, 2014, increased by 0.1 percent from January, 2013. Steel product inventories decreased 2.1 percent from January a year ago but increased 2.2 percent from December, according to the Metals Service Center Institute. Steel imports and finished steel imports jumped 26.6 percent and 27.5 percent, respectively, in January, according to AISI. January’s total and finished steel imports are up 21 percent and 12 percent, respectively, versus January, 2013. Finished steel import market share was an estimated 26.0 percent in January. Key finished steel products with a significant import increase in January compared to December, 2013, include oil country goods (up 57.6 percent). Standard pipe imports were 3.0 percent lower in January compared with December. Global steel capacity utilization hit 74.0 percent in December, 2013, well below levels prior to the global recession started in 2008. Global capacity has nearly doubled to 2.06 billion tons since 2008, while crude
Nickel prices were on the rise as February drew to a close. The London Metal Exchange’s (LME) threemonth contract closed the official session on February 28 at $14,550 per ton, up 5.9 percent from $13,745 per ton at the end of January. Some analysts attribute the rise to uncertainties surrounding a move by Indonesia to ban nickel exports. Global stainless crude steel production reached a new all-time, third-quarter high last year, according to preliminary figures released by the International Stainless Steel Forum (ISSF), up 5.5 percent from 3Q12. Production for the first nine months of 2013 totaled 28 million metric tons (mmt), up 1.4 mmt in comparison to the same period of 2012. MEPS projected an all-time high of 37.3 mmt for the entire year for global crude stainless steel production in 2013. MEPS forecasts that worldwide output will increase by a further 4.6 percent in 2014, to a new peak figure of 39 million tons.
Tubular Products South Korean OCTG escaped anti-dumping duties in a preliminary decision by the U.S. Commerce Department’s International Trade Administration (ITA). The surprising decision ruled that neither Hyundai Hysco Co. nor Nexteel Co. were assessed duties, and no rate was subsequently calculated for other Korean 2
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ASA MATERIALS MARKET DIGEST
© 2014 American Supply Association. All Rights Reserved.
U.S. Pipe & Tube Imports Landed duty-paid value (in $1,000s) Annual & Year-To-Date Data (Jan. – Dec. 2013)
2012
YTD 2012
YTD 2013
% Change YTD
% Change 2008-12
Total Carbon and Alloy Pipe & Tube
12,530,590 12,530,590 10,390,720
-17.1%
-12.5%
Carbon Seamless Tubular Products (Other than OCTG)
2,560,811
2,560,811
2,112,405
-17.5%
1.2%
Carbon Seamless OCTG
3,303,726
3,303,726
2,530,428
-23.4%
-25.8%
Welded Tubular Products (Other than OCTG)
3,119,581
3,119,581
2,634,274
-15.6%
-33.5%
Welded OCTG
1,942,886
1,942,886
1,675,085
-13.8%
40.2%
Flanges, Fittings & Tool Joints
1,386,701
1,386,701
1,330,103
-4.1%
33.8%
Stainless Seamless Tubular Products
635,750
635,750
477,429
-24.9%
-3.3%
Stainless Welded Tubular Products
424,170
424,170
410,584
-3.2%
-9.8 %
Stainless Flanges, Fittings & Tool Joints
665,686
665,686
559,762
-15.9%
28.3%
Source: U.S. International Trade Commission / U.S. Department of Commerce
OCTG manufacturers, the agency said in a statement. Korean accounted for 56.0 percent of the OCTG imports in a massive trade case involving nine countries. A final decision may turn out to be different. Interesting that South Korean OCTG imports spiked in January, more than double December’s total, and around 41.0 percent higher than in January, 2013. Some observers guessed that Korean companies jacked up orders in anticipation of a less favorable ITA ruling. Other importers weren’t so lucky. OCTG firms from India were assessed preliminary anti-dumping margins of between zero and 55.2 percent. Turkish OCTG producers were assessed duties of between zero and 4.87 percent, with Borusan Mannesmann Boru Sanayi ve Ticaret AS and Borusan Istikbal Ticaret TAS receiving no duties. Filipino OCTG imports were assigned a preliminary dumping margin of 8.9 percent, while companies from Saudi Arabia were hit with 2.92 percent duties and Taiwanese producers’ from zero to 2.65 percent. Thailand’s OCTG firms got slammed with duties of 118.32 percent; Ukraine’s, 5.31 percent; and Vietnam’s between 9.57 percent and 111.47 percent. The largest duties were assigned to seamless OCTG. Borusan Mannesmann’s OCTG and line pipe mill in Baytown, Texas, is set to open early, according to AMM. The $150-million facility had been expected to be completed in 3Q14, but company executives told AMM that operations could begin by mid-summer. © 2014 American Supply Association. All Rights Reserved.
The Baytown mill will produce OCTG in API grades N80 through Q125 as well as in custom-engineered grades, and it is expected to displace about 85.0 percent of Turkey’s exports of the products to the U.S.
Copper Copper prices were on the rise throughout most of February before dipping in the final week, closing February 28 at $3.24/lb. on the Comex. That was only slightly higher than the $3.20 level at which the red metal began the month.
Daily Comex Copper Spot Prices February, 2014 $3.40 $3.35 $3.30 $3.25 $3.20 $3.15 $3.10
January’s Producer Price Index saw a 1.5 percent decline in prices for copper and copper-alloy pipe and tube, compared with the previous month. ASA MATERIALS MARKET DIGEST
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considerably, with shipments to South Korea, Taiwan and Turkey being unloaded at depressed prices, according to AMM. The rise in nickel prices are boosting stainless steel scrap, especially grades 316 and 304, as February drew to a close, reversing earlier downward momentum. Another factor was said to be tight supply in certain areas due to shipping problems caused by inclement weather across much of the U.S. this winter.
Plastics PVC resin prices rose 3¢/lb. in January and another 3¢ in February, according to Plastics Technology magazine. Suppliers are said to be looking for another 3¢ increase in March. The increases appear to be sticking. China imported a record amount of copper in January. Observers think it had less to do with economic growth than an attempt to expedite shipments ahead of the Chinese New Year holiday. February imports are widely expected to drop. China’s military is a prime user of copper, especially for warships. Copper’s corrosion resistance in seawater makes it attractive and copper/copper alloys account for 2.0-3.0 percent of its shipbuilding materials, according to The Wall Street Journal.
PE resin is also on an upward swing, rising 4¢/lb. last month. At least one supplier was reported to be considering a 6¢ hike for March, although some analysts are skeptical it will stick. HDPE blow molding grades were at the high end, due to tight supply thanks to exports and weather-related logistical complications.
News of Note
Scrap
ASA industrial PVF distributors started the year sluggishly with average sales in January 5.9 percent below that of January, 2013. On a trailing 12-month basis, ASA’s PVF distributors’ sales were down an average 2.2 percent, according to the association’s most recent Monthly Pulse Report. ASA’s PVF distributor inventories were down 0.9 percent in January compared with the same month of 2013.
AMM’s Midwest Ferrous Scrap Index for No. 1 busheling settled February 10 at $409.09 per gross ton, down 8.0 percent from the previous month. Shredded scrap was at $406.10 per ton, down 7.5 percent from January. No. 1 heavy melt came in at $385.86 per ton, down 7.7 percent from the prior month.
Total construction spending rose by a modest 4.8 percent in 2013, as a relatively robust market for apartments and single-family houses outweighed downturns in private nonresidential and public projects, according to the Associated General Contractors of America.
Further ferrous scrap declines are anticipated in March due to lackluster exports and slack demand. Some analysts queried by AMM ventured that prices will drop between $10 and $30 per gross ton for all scrap grades.
Business conditions for distributors and manufacturers expanded for the thirteenth straight month according to the latest Economic Indicator Report (EIR) from the Industrial Supply Association (ISA). The ISA Manufacturer Index rose from 58.9 percent in December to 62.0 percent in January, while the Distributor Index increased from 55.2 percent in December to 66.4 percent in January. For each index, a reading above 50.0 percent indicates expansion, while a reading below 50.0 percent
Copper is primed to reach $4/lb. by 2016 as signals point to a global supply deficit by that time. Analysts expect slight surpluses in global production for 2014 and 2015.
U.S. ferrous scrap exports rose to a four-month high in December, led by increased purchasing by Turkey and South Korea. They have since weakened 4
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© 2014 American Supply Association. All Rights Reserved.
indicates contraction. The indices have been above 50.0 percent since December, 2012. AIA’s Architecture Billings Index (ABI) rose to 50.4 in January, reversing two consecutive months of decline; any score above 50 indicates billings growth. Inquiries into new projects remained strong, according to AIA. Weakness from 4Q13 persisted into January for firms located in the Northeast and Midwest regions of the country, which may be partially due to exceptionally bad weather this winter. Firms located in the South and West regions continued to experience increasing firm billings, as they have for the last year and a half. The ABI is thought to foreshadow construction by 9-12 months.
Š 2014 American Supply Association. All Rights Reserved.
About Jim Olsztynski For over 35 years, Jim Olsztynski has covered the plumbing-heating-cooling-piping and industrial and mechanical pipe-valves-fittings (PHCP-PVF) industry as an award-winning journalist and editor for a variety of industry publications. He is an accomplished author having published several Essentials courses for ASA University and is soon to publish his own book, titled: Bumps on the Road to Riches: How to Avoid Big Mistakes that Kill Small Businesses. Jim has also made numerous appearances and presentations about the industry and its rich history before live audiences as well as on television.
ASA MATERIALS MARKET DIGEST
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Producer Price Index - Key Industry Products Product Code
December 2013
January 2014
% Change
% Change January 2013
1149-02
289.0
293.4
1.5
4.7
Gates, globes, angles & check valves
1149-0201
321.0
322.2
0.4
2.2
Ball valves
1149-0202
351.7
373.7
6.3
13.3
Butterfly valves
1149-0203
205.5
207.0
0.7
5.2
Industrial plug valves
1149-0204
213.7
212.9
-0.4
4.4
Plumbing & heating valves (low pressure)
1149-0205
278.1
278.1
0.0
0.9
Solenoid Valves
1149-0208
305.6
308.7
1.0
5.8
Other industrial valves, including nuclear
1149-0209
269.4
271.7
0.9
3.5
Automatic valves
1149-0211
164.5
164.9
0.2
2.5
Steel pipe & tube
1017-06
252.7
254.3
0.6
-1.8
OCTG, standard, line pipe, carbon
1017-0671
96.4
97.5
1.1
-3.8
Steel pipe & tube, alloy
1017-0673
97.4
97.8
0.4
-4.4
Steel pipe & tube, stainless steel
1017-0674
98.8
99.5
0.7
-4.1
Metal pipe fittings, flanges and unions
1149-0301
302.4
302.9
0.2
0.9
Copper & copper-base alloy pipe and tube
1025-0239
212.7
209.6
-1.5
-6.4
Plastic pipe
0721-0603
105.3
107.9
2.5
-0.8
Plastic pipe fittings & unions
0721-0604
139.6
141.1
1.1
1.7
1054-02
286.1
286.8
0.2
1.8
Vitreous china fixtures
1052
N/A
N/A
N/A
N/A
Bath & shower fittings
1054-0211
237.0
237.0
0.0
3.9
Lavatory & sink fittings
1054-0218
140.8
140.8
0.0
0.1
Miscellaneous brass goods
1054-0223
290.9
292.7
0.6
0.8
1056
N/A
205.6
N/A
1.9
1061
267.6
267.9
0.0
1.6
Cast iron heating boilers, radiators and convectors
1061-0106
N/A
N/A
N/A
N/A
Steel heating boilers, all classes
1061-0112
172.1
172.1
0.0
2.2
1066-01
339.0
339.0
0.0
-0.5
Electric water heaters
1066-0101
319.4
319.4
0.0
-0.4
Non-electric water heaters
1066-0114
214.1
214.1
0.0
-0.6
32
96.1
96.1
0.0
-1.0
Pipe, Valves & Fittings Metal valves, except fluid power
Plumbing Fixtures, Fittings & Trim
Enameled iron & metal sanitary ware Steam & Hot Water Equipment
Domestic water heaters
Warehousing, Storage & Related Services
Source: U.S. Department of Commerce Bureau of Labor & Statistics
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Š 2014 American Supply Association. All Rights Reserved.