Wednesday, August 26, 2009
MEPS FORECASTS GRADUAL UPTURN IN WORLD STEEL PRICES OVER NEXT TWELVE MONTHS
From MEPS, a steel consultancy in the UK.
The MEPS - World Composite All Products carbon steel price peaked in July 2008 at $US1160 per tonne. In the subsequent ten months the value fell by more than 50 percent to $US562. However, the production curbs are beginning to bite as customers start to rebuild inventories in most regions of the world.
There are now clear signs that steel producers internationally will be increasing output to meet the anticipated higher market demand. This has, in fact, already started. Global production of steel in July 2009 was approximately 11 percent down on the equivalent month in 2008. In comparison, steelmaking in the first six months of this year was almost 20 percent below the figures recorded in the same period of 2008.
Since May, most steel prices have increased steadily - with the MEPS - World Composite figure rising by $US49 per tonne (8 percent) over the past three months. Further growth in transaction values is forecast for the next twelve months.
The MEPS - World Composite All Products carbon steel price peaked in July 2008 at $US1160 per tonne. In the subsequent ten months the value fell by more than 50 percent to $US562. However, the production curbs are beginning to bite as customers start to rebuild inventories in most regions of the world.
There are now clear signs that steel producers internationally will be increasing output to meet the anticipated higher market demand. This has, in fact, already started. Global production of steel in July 2009 was approximately 11 percent down on the equivalent month in 2008. In comparison, steelmaking in the first six months of this year was almost 20 percent below the figures recorded in the same period of 2008.
Since May, most steel prices have increased steadily - with the MEPS - World Composite figure rising by $US49 per tonne (8 percent) over the past three months. Further growth in transaction values is forecast for the next twelve months.
Sunday, August 23, 2009
Testimony on behalf of Michigan’s tool and die industry
Joe Brown gave testimony before the Michigan Republican House Task Force on Jobs. While much of what he wrote applies to stampers all over, this part effected me the most. This very nearly happened to me.
Skittish banks are declining loans to many tooling suppliers since they consider anything with the terms “manufacturing” or “automotive” as red flags in the application or renewal document. How can these companies retool themselves without this? More disheartening is the devastation this has caused many long-time [...] manufacturers and suppliers who were small business owners with impeccable payment histories. In an instant, many owners’ lives turned upside down.
The following excerpt is from my interview with Michigan’s 1993 Women’s Entrepreneur of the Year and a decades-long small business owner of a MTDM supplier in Fraser, Michigan. Her name is Nina Sylvester and sadly her story is similar to many other past—and current—Michigan manufacturing shop owners:
“Bank of America called and told me that they ‘No longer find that Automotive and Manufacturing are lucrative to their business and therefore will not renew my loan and I have 90 days to find new financing.’ Keep in mind that I was never late on a payment, nor am I to this day, 10 months later. I am at the office everyday collecting what little money is left in receivables which is a job in itself. No one is paying their bills, and I hear the same story from everyone. I had in excess of $100,000.00 in bankruptcies alone since the end of last year. I called and had packages put together and interviewed with 20 different banks. They all said the same thing. One bank in particular, Huntington National Bank, I asked them what they were doing with the money that was given to them by the government and she told me that they had it in an account collecting interest and were going to acquire other banks with it.
I also contacted the SBA and was told that they have programs for new businesses but nothing for existing businesses. Meanwhile the bank is on me to pay off my loans in their entirety. They forced me to stop manufacturing and taking orders, forced me to sell off equipment that was appraised in 2006 for $683,000.00. A boring mill that I paid $210,000.00 for, sold at auction for $15,000.00, and that is just one. Tooling that cost in excess of $20,000.00 went for $25.00. Now, I have a building that I paid $470,000.00 for in 1991, they are telling me I will be lucky to get $375,000.00 for. I still owe the bank $650,000.00 and don’t have a clue as to how I’m going to pay that back.
I have been in business 24 years, and have nothing but debt to show for it now. I have worked in this industry for 35 years, and never in my wildest dreams did I ever think that this would be happening in this country. Our government is quick to help foreign countries and will not help their own people. They continue to send work overseas when large corporations here are closing left and right.”"
Skittish banks are declining loans to many tooling suppliers since they consider anything with the terms “manufacturing” or “automotive” as red flags in the application or renewal document. How can these companies retool themselves without this? More disheartening is the devastation this has caused many long-time [...] manufacturers and suppliers who were small business owners with impeccable payment histories. In an instant, many owners’ lives turned upside down.
The following excerpt is from my interview with Michigan’s 1993 Women’s Entrepreneur of the Year and a decades-long small business owner of a MTDM supplier in Fraser, Michigan. Her name is Nina Sylvester and sadly her story is similar to many other past—and current—Michigan manufacturing shop owners:
“Bank of America called and told me that they ‘No longer find that Automotive and Manufacturing are lucrative to their business and therefore will not renew my loan and I have 90 days to find new financing.’ Keep in mind that I was never late on a payment, nor am I to this day, 10 months later. I am at the office everyday collecting what little money is left in receivables which is a job in itself. No one is paying their bills, and I hear the same story from everyone. I had in excess of $100,000.00 in bankruptcies alone since the end of last year. I called and had packages put together and interviewed with 20 different banks. They all said the same thing. One bank in particular, Huntington National Bank, I asked them what they were doing with the money that was given to them by the government and she told me that they had it in an account collecting interest and were going to acquire other banks with it.
I also contacted the SBA and was told that they have programs for new businesses but nothing for existing businesses. Meanwhile the bank is on me to pay off my loans in their entirety. They forced me to stop manufacturing and taking orders, forced me to sell off equipment that was appraised in 2006 for $683,000.00. A boring mill that I paid $210,000.00 for, sold at auction for $15,000.00, and that is just one. Tooling that cost in excess of $20,000.00 went for $25.00. Now, I have a building that I paid $470,000.00 for in 1991, they are telling me I will be lucky to get $375,000.00 for. I still owe the bank $650,000.00 and don’t have a clue as to how I’m going to pay that back.
I have been in business 24 years, and have nothing but debt to show for it now. I have worked in this industry for 35 years, and never in my wildest dreams did I ever think that this would be happening in this country. Our government is quick to help foreign countries and will not help their own people. They continue to send work overseas when large corporations here are closing left and right.”"
Labels: manufacturing
Wednesday, August 12, 2009
Some manufacturers find California cheaper than China
From the San Francisco Business Times:
Four Northern California companies in the past five months have reshored products from China to Wright Engineered Plastics, said President and CEO Barbara Roberts. Their reasons range from costs to vicinity to market and from quality to finance.
Chinese manufacturers, for example, won’t ship until a product is completely paid for, Roberts said, and then transportation could add another 30 days or more.
“That’s a double-whammy,” she said.
This is something I commented on already a few years back. As some jobs go to China, others come back. And I think this "onshoring" trend, if anything, is increasing recently, as health and safety concerns raise their heads.
Four Northern California companies in the past five months have reshored products from China to Wright Engineered Plastics, said President and CEO Barbara Roberts. Their reasons range from costs to vicinity to market and from quality to finance.
Chinese manufacturers, for example, won’t ship until a product is completely paid for, Roberts said, and then transportation could add another 30 days or more.
“That’s a double-whammy,” she said.
This is something I commented on already a few years back. As some jobs go to China, others come back. And I think this "onshoring" trend, if anything, is increasing recently, as health and safety concerns raise their heads.
