Sheet Metal Stamping Simulation

Like the steel industry it depends upon, Triad International Metals Inc. is doing a lot better this year than last year, but not quite as good as the boom of 2008, said Ronald Hammond, a co-owner and CEO. The privately held firm is based in Horsham, Montgomery County.

 

Triad's Neville Island plant was the home of Pittsburgh-Des Moines Steel Co. in the 1960s.

 

Hammond, who employs about 40 at the facility, expects shipments this year to reach 215,000 tons. That's a lot better than 2009 shipments that fell below 190,000. Still, Hammond is proud to note that Triad was among the 5 percent of steel service centers that made money last year.

 

The improvements Triad sees in its business mirror that of the sector as a whole, according to the Metals Service Center Institute, a trade organization in Rolling Meadows, Ill.

 

"It isn't exactly robust, but they can breathe. They're doing better in shipments and profits," said Steve Weiner, a spokesman for the institute.

 

Shipments totaled nearly 3.2 million tons in August, up 25 percent from a year ago. From January through July, steel shipments reached 23.7 million tons, 19 percent higher than a year ago. The steel inventories of 7.4 million tons at the end of August were 32 percent more than last year, according to the Metals Service Center Institute.

 

The service centers serve as middlemen in the industry, buying wholesale from steel producers in amounts approaching thousands of tons, and selling metal to users in amounts as low as a one or two tons, said industry analyst Charles Bradford of Affiliated Research Group of New York.

 

Bradford said he believes that September was not quite as good as August, and October may be a little rough because of falling scrap prices -- an indication that mini-mills that melt scrap to make steel believe demand will drop. If there is an economic slowdown next year as some economists are predicting, that will impact service centers as well, Bradford said.

 

Another indication of the health of the sector is inventory, which averaged about two months and 10 days at the end of August, the metals institute said.

 

Inventory fell to "extraordinarily low levels" last year and still has not rebounded to its typical level of three months, Weiner said.

 

Triad's inventory of steel beam, bar, tube and channel is spread across two warehouses. These products, some 70 feet in length, are delivered by barge, railroad car or truck. Triad takes customers' orders and cuts the steel to the length they need.

 

Hammond said his goal is to have a supply of steel inventory of about 29-to-32 days, and turn that inventory over as quickly as possible.

 

"We really live month-to-month," he said.

 

The price at which Triad Metals sells steel is close to the price it bought it a month ago. The longer it sits on the ground, the more likely the commodity will change in price.

 

Hammond, a veteran of 30 years, knows how much those prices can swing. Two years ago, before the economy dipped, Hammond said steel shipped from his warehouses could command an average price of $1,200 a ton. The company shipped about 250,000 tons that year.

 

A year later, a ton of steel sold for only $700.

 

"That's $12 million" in potential revenue lost, Hammond said.