Planes, trains, and automobiles: familiar trappings of holiday travelers around this time of year. A steel plant in Pueblo, CO, is benefitting from the continuing growth of at least one of those ever-enjoyable travel methods: with the need for head-hardened steel used in laying rails expanding, the facility will be stepping up its production in 2012. This growth in investment will be accompanied by further efforts to produce higher-quality rail steel, capable of handling the heavy-duty demands of railcar coal transport in addition to travel and commuter rail.
Our work here at Keats Manufacturing is a bit removed from high-impact rail construction, but the repercussions in the industry at large are apparent. Our products do, of course, involve steel, and we’ve seen a number of commodity suppliers come and go over the past few years, in the face of waning production and a difficult economic climate. An investment of this caliber by any raw material producer is a sure sign of strength in the larger manufacturing world – and we also applaud the continued innovation in an industry as well-established as steel production.
This NASDAQ report on Nucor’s 4th quarter forecast – expecting year-over-year growth from Q4 2010, but a decline from Q3 numbers – also discusses how the steel manufacturer’s strengths and weaknesses play into the manufacturing market and industry. Of course, like any commodity, pricing of Nucor’s products – sheet steel, rolled steel, and so on – and subsequent profit or loss, is tied directly to the performance of those companies that purchase these materials.
Core U.S. manufacturing sectors like automotive, energy, and heavy equipment have, according to Nucor, been stronger this year than last. Obviously, this is great news, with the only minor downside being that an especially strong early 2011 means that a downward trend was shown for the year as a whole. Especially in this still-uncertain economic climate, such ups and downs are to be expected, and we see a positive outlook in the fact that this year’s lows are higher than last year’s lows – and, in some cases, are even better than previous highs. Also something to look forward to: a renewed burst of raw material purchasing as budgets are replenished in January, promising another early-year boom for 2012. Keep in touch with Keats for more information moving forward!
It’s one of those everyday parts of life that you never really notice – until it’s not there. Sure, this could apply to lots of things: your shoelaces, for one, or your cell phone, for another. What we’re talking about today, though, is the overhead dome light in your car. It sure can be jarring to pull open your driver’s side door at night, expecting to duck into a well-illuminated interior, only to be met with the same pitch-blackness that you’re standing in. Dome lights have been on our minds more than usual here at Keats, though, since we’ve been using a brand new piece of equipment specifically to manufacture dome light components for one of our partners.
With such a versatile range of operations here, we can assist all types of other manufacturers in getting their products completed and ready for shipment. It’s especially rewarding when one of our long-time partners is able to expand a product line that Keats has been an integral part of, which was the case with this dome light manufacturer. Landing a major contract with a domestic automotive manufacturer (our industry colleagues will understand our inability to use specific names here), our partner needed increased production from our end – and fast! Our new stamping press allowed us to step up and meet that need, keeping the dome lights rolling off the assembly line and into your car. Our numerous facilities and ample production space are ideal for this type of flexibility: obtaining new, dedicated equipment on demand to meet a specific need. Check out our website for more stories of manufacturing success.
Automotive, spring stampings, military parts: the U.S. manufacturing industry covers a vast amount of products and uses, and all of it is surveyed periodically by the ISM. The ISM, or Institute of Supply Management, independently surveys incoming orders, new equipment deliveries, and, of course, production, and compares it against previous months and other countries. November’s report yielded results that came as a surprise to many, according to this MarketWatch report: not only was U.S. manufacturing booming, but it was outpacing the rest of the world.
While this is certainly good news, its unexpectedness yields some questions. Or, maybe, just one: “Why?” The article proffers a couple of theories, the most plausible of which are an expiring tax credit on new equipment, and increased auto production. Also mentioned is a corresponding and equally surprising lack of production in countries like Germany and Mexico. At Keats, our El Paso facility allows us to work closely with manufacturers in Mexico, and one of our, and their, key industries is the automotive sector. This partnership has always proven beneficial, in our view of the U.S. manufacturing picture, and we’re confident that this latest report will yield to signs of increased production at those facilities, while maintaining the strong trends here.
Keeping track of developments in steel markets can be a head-spinning endeavor, but that doesn’t mean we don’t try here at Keats Manufacturing. It’s well-known that our best advice, in the face of uncertain future cost trends, is to plan and purchase just as you always have. Accounting for cost increases and decreases is just too difficult, too frustrating, to try and do otherwise. Recent steel news illustrates this to a “T.”
Out of Indiana this week: NLMK’s flat rolled steel prices will be increasing, on the heels of Nucor’s decrease in coated steel pricing. Even more recently than either of these, South Korea’s Posco announced record stainless steel production, market expansion, and profitability. This, in one of the most tumultuous times for the industry in recent memory. Perhaps not surprisingly, Posco’s spokesperson played coy about raw material sources and costs. Magicians don’t reveal their secrets.
Unfortunately for many of us, material options are often limited, and we can’t jump from one material to another based on price alone. As this news from just the past few days shows, the only safe prediction is unpredictability.
