EFCO Metal Finishing sent President Terry Schultz to an event put on by the AWMI, the Association of Women in the Metals Industry, last week at the Radisson Hotel in Menomonee Falls. David Miller and Eric Robbins of Worthington Industries in Columbus, OH were the guest presenters, and below were some of the highlights from the presentation.
Steel prices are falling, and a big reason for this is that China continues to overproduce compared to demand. Other reasons include a slowing economy, an excess supply of iron ore from rapid growth, and the value of the U.S. Dollar, making it easy to import, but tough to export.
Steel mills have filed three separate anti-dumping trade cases against a number of foreign competitors claiming that imports are harming the domestic steel market. Three separate products are involved: hot rolled, cold rolled, and hot dipped galvanizing. EFCO Finishing’s customer base is greatly affected by this, as they are heavily dependent on these three products in manufacturing their parts. This trickles down to the finishing side of our business, as less parts produced translates to fewer parts being sent in for vibratory finishing, ball burnishing, steel grit and shot blasting, degreasing and more finishing services. Outside of these trade cases, there is very little a mill can do besides reducing capacity.
On a brighter note, the outlook for the auto market remains strong, and continues to hold up the domestic steel market. Residential Construction, Forestry, Lawn and Garden and Heavy Transportation are also optimistic for both 2016 and 2017, predicting slow, steady growth.
Globally, the general outlook in the market is that steel demand is expected to stabilize in 2016, but a strong rebound is not expected. Nobody is really expecting a strong rebound, although all bets are off if mills start reducing capacity, causing localized market constraints.
Overall, a very interesting evening about a topic very pertinent to the manufacturing industry.