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Asphalt_Gundam
Asphalt_Gundam Reader
5/12/22 1:05 p.m.

I'm not normally one to have bleak outlooks as the type of person who always finds a way to fix/solve a problem but this is ridiculous and getting worse at an exponential rate.

I work for a heavy equipment manufacturer and things are starting to look dire. It isn't for lack of busy either...we've been pushing at maximum capacity now for months. I run a very large CNC Mill

It started being noticeable last year in the supply of steel. Some stuff was backordered but we still had it in a week or two. Then around 8 months ago specific plate or round stock needed was putting some jobs on hold for a couple months until we could get the raw material. 

6 Months ago: Main stream production materials from normal suppliers started getting intermittent with long backorders. This caused the company to start getting material from any source that had it in stock so as not to bring production to a pause. What we got was material of reduced quality or sizing compromises that caused additional work to be required. Tube stock with smaller ID, metal with impurities, plate that has to have the mill scale ground off before it can even be welded properly....

3 Months ago: minor substitutions started being required to complete jobs because the spec'd material was unavailable in reasonable time frame.

2 Months ago: I notice that the tooling inserts cabinet is looking low on supply. Worst of all its the inserts that get used on most of the mills for finish boring anything between 1.6 and 3.0" holes. I voice the lack of inserts to management and get told that it'll be looked into. A week later I get informed that those inserts are a month back ordered. 

1 Month ago: Myself and another machinist have been hand re-sharpening inserts just to get by. That back order shipment of inserts (we wanted 5-6 boxes of 10).....we got 10......that right 10 inserts total to supply 3 machines that used that insert daily. A week later I get some larger radius inserts that I asked for the previous month to combat the poor quality material that rapidly chipped the normal insert. Even more raw material is unable to be come by. And to top it off two mills and lathe run their coolant barrels dry within a day. Where are the fresh barrels??? Back ordered as they were ordered over a month prior.

This week: Raw material quality that we can get is causing problems across the board in machining, the insert supply has been exhausted and I'm now using the wrong bit style for the job just be able to do it at all...huge time increase for ok results. I complain to/notify management and get informed that they are "literally scraping the bottom of the barrel" to get any raw materials. In fact...for some stuff we are now forced to get solid round stock and drill/bore the works to the sizes of tube needed.... Well at least the coolant showed up, 4 out of 6 barrels ordered. I've only been putting strait water in the machines for over 2 weeks just to keep running parts. Then have a disaster of a day with breaking drill inserts left and right. Gave up and reprogrammed the part to use a different tool, later find out that the material was substituted for something else we had...which is also significantly harder. Even more hours of labor and cost added... Oh and more inserts you ask? Suposedly there's a "few" on the way from Germany of all places...

A quick Google search comes up with several articles about rapidly shrinking steel, stainless, and aluminum stock piles on top of even bigger reductions to global production. How TF is demand high as ever but production is being reduced? This isn't even and "overseas" problem as the Taconite mines near me just went into a 6 month idle for a "claimed" cost of production/reduced demand reason. 

If this continues manufacturing production could come to a screeching halt because we have no material to build anything.

SV reX
SV reX MegaDork
5/12/22 1:13 p.m.

Yup. Same problems in construction. 
 

It's now quite normal to see lead times of 6-13 months for things that used to take a few weeks. 
 

Concrete, metals, wood, glass... ALL materials. 
 

It can't go on. 

Duke
Duke MegaDork
5/12/22 1:18 p.m.

In reply to SV reX :

Absolutely.  Distributors are selling roofing jobs right now that won't get delivered until April 2023.

 

Mr_Asa
Mr_Asa GRM+ Memberand PowerDork
5/12/22 1:26 p.m.

We briefly saw prices for aluminum drop and some lead times that were 6 months or more out shrink to half that, but I think supply has dried up again.

We have jobs from 2020 that we are just getting around to finalizing and putting into production because the architects and engineers sat on them for so long.  Now they are all balking at the price escalation we are forced to do because we quoted them when you could whistle and have someone drop off 10 tons of 6061 extrusion.

aircooled
aircooled MegaDork
5/12/22 1:27 p.m.

Well a good guess could be made by doing a quick check of the top steel producers in the world (shown below).  Probably similar for other metals also.  No idea on construction, unless we are talking about non-wood.  I would think wood supply should have recovered by now (a lot of which comes from the north west I believe).

I suspect the US get a very large percentage of their steel from China.  There are obvious supply chain backups from there still happening, and China has been completely shutting down cities and plants because they feel the Zero COVID policy is the way to go (which is a bit weird for a number of reasons).

https://worldsteel.org/steel-by-topic/statistics/top-producers/

Asphalt_Gundam
Asphalt_Gundam Reader
5/12/22 1:34 p.m.

In reply to aircooled :

Of course we get a lot of steel from China....we can't make quality steel here because properly smelting it is a big "you can't do that" from the EPA.

As for anything in construction I can only imagine that any price quote from today could very well be irrelevent by the time even a fraction of the materials showed up.

NY Nick
NY Nick GRM+ Memberand Dork
5/12/22 2:08 p.m.

We are seeing it at work too. My site buys a fair amount of Stainless (~1M lbs). We buy complete mill heats directly from a mill in Europe because they run a specialty alloy for us. Our vendor that rolls these plates for us has been looking for alternate suppliers and they have been told by other mills if you aren't a current customer we won't even quote to you. I really am struggling to understand how supply and demand are this far out of whack right now. 

On a related note I buy German manufactured band saws and material storage units. I was talking to the factory today about some upcoming work and they told me they are taking orders for late 2023 delivery right now because they can't get steel (supply was from Ukraine) or VFD's right now. They are also unable to quote material storage units because in the quote lead time the steel prices are changing so much they have to go back to the customer for more $. This is like a 1 month cycle!

pheller
pheller UltimaDork
5/12/22 2:27 p.m.

Steel production can be made to exceed EPA regulations, the problem is that it costs money, and 9/10 it is advantageous when youre talking about investing billions of dollars into a steel plant that you know what the future outlook for steel prices will be. 

 

Companies may have been more interested in those investments had the steel tariffs stuck around, but I think many domestic producers found that operating climate agreeable under the previous administration and didn't invest in any new mills. 

 

Nucor and US Steel are both underway in building new steel mills in WV and AR. They will add maybe 10 million tons of supply. China makes roughly 12 times the amount of steel as the USA (85 million tons vs 1 billion tons), so even with these new factories, we are very much reliant on their production. We've got maybe a little over 100 steel factories in the USA, China has like...3000+. 

 

To a certain extent, I don't wonder if this isn't China squeezing some of the supply just to stress the rest of the world. China is far more self-sufficient that we give them credit. 

 

 

 

alfadriver
alfadriver GRM+ Memberand MegaDork
5/12/22 2:28 p.m.
Asphalt_Gundam said:

In reply to aircooled :

Of course we get a lot of steel from China....we can't make quality steel here because properly smelting it is a big "you can't do that" from the EPA.

 

I'm sorry, but IMHO, that's crap.   There are plenty of smelters in the US- we have some here in SE MI, even.  So that's blame that has no legs in the US.  It's an excuse for running a crappy business.  I have no reason to doubt this article that suggests that Ford gets over 90% of it's steel and aluminum from US sources- https://www.autonews.com/article/20180312/OEM01/180319959/recycled-aluminum-for-f-150-may-benefit-ford

The other problem is that it implies that China has no rules- and they VERY much do- which are tightening faster than anywhere else in the world.  Given the State pays when people get sick, it's in their financial interest to keep people from dying of pollution- which they have figured out the very hard way in the last two decades.

bearmtnmartin (Forum Supporter)
bearmtnmartin (Forum Supporter) GRM+ Memberand UltraDork
5/12/22 2:45 p.m.

My manufacturer buys a lot of resin and it is in short supply. They keep outsourcing it to keep production moving and then wind up with resins that are not UL certified, so I receive shipments of pumps which have no UL label. Then they catch up and the label appears again. 

I think these supply chain issues are about to run into a brick wall of plummeting demand. It is about to get really ugly.

Asphalt_Gundam
Asphalt_Gundam Reader
5/12/22 2:49 p.m.

In reply to alfadriver :

Things are changing in regards to pollution and china, no denying that. So I suppose my comment is outdated but I remember it being a huge topic for months and months around here back in the early/mid 2000's because of the massive layoffs and mining cutbacks because of mills shutting down. About an hour drive from starts the Iron Range where the entire area survives off mining. Argument at the time was in wasn't profitable for the mills in Michigan and Ohio to modernize and meet EPA requirements so they were shutting down and production going overseas. The mining community here has had a lot of ups and downs in the last 20 years from thinking they'd be shut down entirely to back to normal...for a few years anyway.

Asphalt_Gundam
Asphalt_Gundam Reader
5/12/22 2:59 p.m.

In reply to bearmtnmartin (Forum Supporter) :

About to get ugly is well put. I feel like the wall is coming where inevitably the government is going to step in and decide who's important enough to get materials and who isn't.

trucke
trucke SuperDork
5/12/22 3:36 p.m.

We have a pump supplier telling us their supplier of stainless steel is giving them quotes valid for 8 hours..8 HOURS!!  Seriously?  It takes me weeks to get approval to buy anything.

We buy a lot of glycerin and lecithin to use in our dietary supplements.  This comes from sunflower - grown in Ukraine!  Global Sourcing is scampering to keep us supplied.  In addition, we are told that our suppliers of these materials are having difficulty getting steel 55 gal drums to ship the material in.  Would we take it in IBC totes (275 gallons).  Our production areas do not have the space to handle these larger quantities, so we are setting up a space to transfer back into reusable drums to feed production.  To do that, we need stainless steel piping and fittings.  And we've come full circle!

alfadriver
alfadriver GRM+ Memberand MegaDork
5/12/22 4:08 p.m.
Asphalt_Gundam said:

In reply to alfadriver :

Things are changing in regards to pollution and china, no denying that. So I suppose my comment is outdated but I remember it being a huge topic for months and months around here back in the early/mid 2000's because of the massive layoffs and mining cutbacks because of mills shutting down. About an hour drive from starts the Iron Range where the entire area survives off mining. Argument at the time was in wasn't profitable for the mills in Michigan and Ohio to modernize and meet EPA requirements so they were shutting down and production going overseas. The mining community here has had a lot of ups and downs in the last 20 years from thinking they'd be shut down entirely to back to normal...for a few years anyway.

That may have been "the word" but look back and note how many companies stayed and continued to make steel and aluminum in the US since then.  If it were factually accurate, then all of the companies would have left.  They didn't.  Seems to me that it puts a lot of question into "the word" back then.  

Iron ore is still mined in the US, it's still processed in the US, it's still taken on the Great Lakes to processing plants, and it's all legal under the Clean Air Act (and whatever regulations cover mining).  

 

SV reX
SV reX MegaDork
5/12/22 4:45 p.m.
Asphalt_Gundam said:

In reply to aircooled :

Of course we get a lot of steel from China....we can't make quality steel here because properly smelting it is a big "you can't do that" from the EPA.

As for anything in construction I can only imagine that any price quote from today could very well be irrelevent by the time even a fraction of the materials showed up.

Most of our vendors will only hold their price for 2 days. 

SV reX
SV reX MegaDork
5/12/22 4:49 p.m.

You ain't seen nothing yet. 
 

The CEO of the auto dealership group I am working for told me today that he is only going to be allotted 85 cars per month for July and August. 
 

He would normally sell 2800 cars in those 2 months. surprise

Fueled by Caffeine
Fueled by Caffeine MegaDork
5/12/22 4:52 p.m.

You guys should look up nucor. We can make very high quality steel in the us. 

Datsun310Guy
Datsun310Guy MegaDork
5/12/22 5:55 p.m.

Cork    
 

I buy cork & rubber tape AKA mulehide tape and we're going on waiting 9 months now.  

californiamilleghia
californiamilleghia UltraDork
5/12/22 6:07 p.m.
Datsun310Guy said:

Cork    

Where is cork coming from , I remember lots of cork trees in the south of Portugal .

Pete. (l33t FS)
Pete. (l33t FS) GRM+ Memberand MegaDork
5/12/22 6:13 p.m.
Asphalt_Gundam said:

In reply to alfadriver :

Things are changing in regards to pollution and china, no denying that. So I suppose my comment is outdated but I remember it being a huge topic for months and months around here back in the early/mid 2000's because of the massive layoffs and mining cutbacks because of mills shutting down. About an hour drive from starts the Iron Range where the entire area survives off mining. Argument at the time was in wasn't profitable for the mills in Michigan and Ohio to modernize and meet EPA requirements so they were shutting down and production going overseas. The mining community here has had a lot of ups and downs in the last 20 years from thinking they'd be shut down entirely to back to normal...for a few years anyway.

"Meeting EPA requirements" is finger point speak.  What they really meant was "we can have a company that pays its workers $1 a day make steel for us".

 

Kreb (Forum Supporter)
Kreb (Forum Supporter) GRM+ Memberand PowerDork
5/12/22 6:21 p.m.

Yep. I run a metal fabrication shop, and prices have tripled on some items. Others are simply not available for a matter of months. 

Sometimes we benefit, such as the contractor who came in today who is going to have us make up a bunch of steel window frames. Double-glazed, Low-E glass is readily available so he's going to have us make and powder-coat- the frames and he'll install the glass. In other words, the way they did industrial construction 60 years ago - forward into the past! Bear in mind that this will not be inspected, because the windows would be illegal per the California Title 24 Energy code.

93EXCivic
93EXCivic MegaDork
5/12/22 6:28 p.m.

Russia and Ukraine are also fairly large producers of steel. So don't expect it to get better quickly.

OHSCrifle
OHSCrifle GRM+ Memberand UltraDork
5/12/22 7:10 p.m.
Mr_Asa said:

We briefly saw prices for aluminum drop and some lead times that were 6 months or more out shrink to half that, but I think supply has dried up again.

We have jobs from 2020 that we are just getting around to finalizing and putting into production because the architects and engineers sat on them for so long.  Now they are all balking at the price escalation we are forced to do because we quoted them when you could whistle and have someone drop off 10 tons of 6061 extrusion.

I can't explain why.. but all our design contracts typically require us to go back and redesign if project bids come in "over budget" (targets). In the current economy it is like walking into a wood chipper  - we get to design it again on our dime and then do it again after that. We really need an economic Force Majeur clause.

It was bad before inflation went bananas. Now it's worse... Sad trombone. 

11GTCS
11GTCS Dork
5/12/22 8:30 p.m.

I’m still waiting for some equipment that was ordered last August, it’s been delayed shipping three times now.  Two other orders in play with six month lead times, one of which is 11 smaller rooftop HVAC units that were in stock when I originally quoted the project.  Too bad the customer couldn’t make up their mind.  Price went up roughly 20% while they were thinking about it which fortunately is not an 11GTCS problem.   

We’re still selling work like it’s never going to end, my fear is all these orders arrive at the same time and we can’t staff the jobs fast enough to finish the work so we can pay for it all.   Nothing is easy right now.  

wake74
wake74 Reader
5/12/22 10:29 p.m.

I'm (well, we, big team) in the middle of buying out a $2B USD construction project, it's a daily challenge in terms of cost escalations and schedule extensions on material, let's not even talk about the general shortage of people in the skilled trades.  A good portion of the project is stainless, and Nickel (a key component of SS) has been nuts. It's come back off the crazy pricing in April, but still high.  It certainly makes accurate forecasting for a multi-year project a bear.

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