In the metal stamping industry, one of our biggest challenges is often out of our control: the price of materials. While we try to stay ahead of the trends and buy raw materials when the prices are at their lowest, the market is a chaotic place and so is supply and demand.
On the supply end, there has never been a time that saw more production around the world. Since 2007, total world crude steel production has jumped almost 200 million tons with China leading the way. At the same time, demand has skyrocketed, so the cost savings have been limited and some critics claim quality has fallen. For those who do not rely on foreign metals, this trend towards overseas purchasing has also raised the prices of higher quality, American-made products. Massive swings in prices, some say caused by reckless commodity trading, have deeply affected the metal stamping industry.
Another part of the equation is a change in demand. Many major industries, including the automotive sector, are moving away from steel and iron and into lighter-weight aluminum. The demand for more fuel efficient, thus lighter-weight, products is a major driver in this switch. However, it remains to be seen just how much aluminum will replace steel in applications, as opposed to act as another option.
Overall, the experts agree that forecast for the metal stamping industry in the U.S. is a positive one. The WSJ claims that our industry will grow at a CAGR of 7.91% by 2016, which is great news. However, the question remains if this tricky balance between supply and demand will directly affect our customers and us. No matter what happens, American Industrial will always do our best to bring both the highest American-made quality and the lowest prices to all of our customers.