What's New at Berlin
July 28, 2005
 There are a lot of good things going on at Berlin Metals these days.
Earlier this year, we received our ISO/TS 16949: 2002 and ISO 9001:2000 Certification. This certification shows our automotive and other customers, as well as our suppliers worldwide, that Berlin Metals is fully committed to being recognized as a long term supplier of quality steels and processing. To the best of our knowledge, none of our direct competitors have taken the necessary steps to implement or be certified to this very demanding and tough new automotive quality system.
After working very hard throughout 2004 to successfully keep our customers supplied with steel in the face of a worldwide shortage of Tin Mill Products, we now have a healthy supply of inventory to cushion us from potential delays in delivery from our network of world class steel mill suppliers or spikes in demand from our many customers.
The consolidation of steel mills worldwide has especially impacted the number of quality suppliers of Tin Mill Products who sell this product line in the US. Our long, successful history and reputation for integrity has consistently enabled us to continue the growth of our relationships with the merged steel mill entities. This was never more important than last year when, due to the unprecedented increase in market price of hot and cold rolled steel, most mills chose to de-emphasize their Tin Mill production to maximize the profits from the other commodities.
The hot rolled spot market price for mill buyers went from $220/ton in 2003 to $800/ton in September of 2004, a 360% increase. The carbon steel market has slowed down since it's peak late last summer, and most flat rolled carbon steel prices have declined with supply being more plentiful for hot rolled, cold rolled and galvanized. Hot rolled prices on the spot market are in the neighborhood of $460/ton, a significant decrease from last year's peak to be sure, but still 210% higher than the low point of 2003.
Unlike hot rolled and cold rolled, Tin Mill Products have never had rapid or frequent price swings. And though the increase in prices from 2004 to 2005 were large by historic standards, they were small compared to the other steel commodities. Even though these other steels have seen lower prices this year, the supply and pricing of Tin Mill Products, accounting for only 1.6% of global steel production, haven't been affected. A few mills in the world, not all of them of good quality, have returned their production to the level of 2003 but this hasn't led to an oversupply or to lower prices.
In 2004, our stainless steel strip business grew by over 100%. We're on pace to grow it by another 30% this year. As a result of our increasingly diverse customers, we have a wide assortment of stainless steel alloys, tempers and thicknesses available in our inventory. This makes it easier to initiate programs with new customers which is part of the dynamic fueling our annual growth.
Late last year, we reached agreement with our production labor force for another 5 year agreement that extends our cooperative relationship to over 40 years without any work stoppages or contract disputes. This long term stability allows us to focus our attention on the necessary education, training and safety programs to run our operation at peak efficiencies.
We have been in our current location for 20 years. We've recently signed another 5 year extension to our lease that also continues the stability that our customers rely on. Our location at the southern edge of Chicago, near to steel mills, airports and expressways, is ideal. We'll be revamping our plant lighting to both increase safety, enhance productivity and reduce our electricity usage.
Finally, we're placing an order for the construction of a new coil slitting line that will be installed in early 2006. This new line is being designed to be faster to set up, to run and to slit with even tighter tolerances than the lines we currently operate. We'll be able to run coils that are thicker, wider and heavier than we do now, while continuing the excellence in light gauge that we're known for. This investment will allow us to continue for many years to provide the highest quality slitting that our customers expect and require.
That's all for now. Please check back later for updates.
Regards,
Roy Berlin
President
Rberlin@berlinmetals.com
Other Newsletters:
July, 2006 March, 2004
September, 2003 January, 2003 April, 2002
September, 2001 May, 2001 January, 2001
August, 2000 April, 2000 |
