Relocation of industrial purchasing – the Plate Spring China Inc is at your side

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According to a study by the French consultancy AgileBuyer and the Conseil National des Achats, the following trends have been observed in France.  They mark a fundamental evolution that is also valid for other countries in Europe, including China.

Extract from the Executive Summary of this study

  1. A much stronger desire to relocate in Europe and in France

In 2022, crises will push 47% of purchasing departments to relocate. This is 17 points more than in 2021. Although price remains a barrier (13% in 2022 compared to 18% in 2021), it is above all difficult to buy French because certain products are not available in France (for 30% of respondents). In 2022, the areas where purchases will be relocated will mainly be in Europe (80%) before France (72%).

 

  1. A crisis marked by shortages

In 2022, 68% of companies will be faced with shortages. Shortages are to be found in strategic sectors such as the automotive industry (78% of respondents) and mechanical engineering/metallurgy-furniture equipment and textiles (75%). These shortages have had a strong impact on company margins according to 65% of respondents.

  1. Metals, raw materials and electronics top the list of shortages

Metals (23%), raw materials (excluding metals and chemicals) (17%) and electronics (14%) top the list of shortages identified by purchasing managers. This is closely followed by IT (13%) and transport (12%). Thus, the lack of semiconductors has a strong impact on production in the electronics and IT sectors, but also in the automotive sector.

  1. Securing supplies is still a topical issue

82% of purchasing departments will implement actions to secure supplies in 2022, compared to 74% in 2021. Continuity and security of supply are considered more important for 2022 for 45% of purchasing departments.

In this context, the Plate Spring China Inc, thanks to its in-depth sectoral knowledge of the sectors most affected by this fundamental trend, its policy of closely monitoring the evolution of raw materials (see our various points on /fr/actualites/), its policy of anticipating purchasing needs in order to meet the forecasts of its customers, its mastery of materials (/fr/matieres-finitions/) and its broad technical capabilities, can help its customers to respond quickly and solidly to the supply challenges they face.

With over 20% of its turnover from civil engineering machinery, forklift & industrial vehicle, The Plate Spring China Inc has extensive expertise with global and European leaders in these industries.

For this sector, Plate Spring China mainly manufactures a set of laser cut parts or mechanical press (shim, washer) and a set of sheet metal parts and welded assemblies. The Plate Spring China Inc masters the wide range of the control and exigence systems needed for clients such as Caterpillar.

From the unit to several million pieces, Plate Spring China offers a comprehensive solution. Whether you are in a planning phase and need our expertise or already have your final plans and specifications, we are here to help you.

Discover our range of products

Springs and wire forms

Stamping & parts forming

Laser cutting & sheet metal works

Filame’s digital strategy wins international award

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On 8 December, Plate Spring China won the International Award from Lead Forensics for its international digital strategy.

Lead Forensics highlighted the successful integration of Plate Spring China’s website () with the Lead Forensics solution for tracking visits, and more specifically the strategy implemented to qualify visitors according to their industries and geographical markets.

This solution allows Plate Spring China to have a very quick proactive approach to qualify the needs of prospects and customers who visit its website and interact with them about it.

Watch the award ceremony in the video

Evolution of the prices of the alloy surcharge for stainless steel

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The price of the alloy surcharge (share of chromium and nickel) in the price of stainless steels continues to rise with no easing in sight.  This share constitutes more than half of the cost of stainless steels.

Moreover, it should be remembered that the price of stainless steel is that of the day of delivery with the price of the current month’s alloy surcharge.  Suppliers can no longer afford to offer locked-in prices for periods longer than a few days in view of the volatility of prices.

Finally, tensions on delivery times remain high and it is not uncommon to have delivery times fixed at several months for certain grades of stainless steel.

Evolution of the prices of the alloy surcharge for stainless steel (E/kg)

Evolution of raw materials prices (steels, stainless steel, alloys, etc) in the coming weeks

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According to its various suppliers and the suppliers it met at the BLECH in Stuttgart last week, Plate Spring China thinks that further increases in material prices are to be expected, particularly for strip (sheet and coil):

  • For steels (spring and non-spring), the increase would be €250 to €300 / tonne from January 2022.
  • For 304 stainless steel, an increase of about €700/tonne is expected from week 45
  • Furthermore, for 301 and 304 stainless steel, the alloy surcharge (the price of which is set on the day of delivery) continues to rise and to influence the price of these materials upwards.  This increase is mainly due to the rise in the price of nickel.

The various suppliers consulted by Plate Spring China cannot predict the duration of the upward movement or predict when prices might stabilise.

Delivery times remain relatively long.  Plate Spring China therefore urges its customers to plan their orders sufficiently in advance to enable Plate Spring China to continue to anticipate its purchases and to continue to keep delivery times as reasonable as possible.

Plate Spring China has hired 10 young people over the last 18 months

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To strengthen its teams and support its rapid growth, Plate Spring China has hired 10 young people over the last 18 months.

Among them, Plate Spring China has hired 7 young people from technical studies to train them in its various departments: press operators, spring machine operators, machine maintenance technician, prototypers and design office technicians.  Plate Spring China is thus part of a long-term approach to training its personnel, particularly for all the technical professions “in short supply”.

Plate Spring China has also strengthened its support teams in the quality, sales and accounting departments.  Plate Spring China is also still looking for a technical-commercial project manager for its commercial department.

Steel price developments: opinions differ on whether the current level will be maintained

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Import volumes of basic steel (ST37 style for construction) into the EU rose sharply in the 3rd quarter. This massive influx of rolled material from Russia, India, Vietnam – but not from China, which has reduced its capacity – attracted by the high price level in Europe is a first threat to the high price policy that the major European steel producers are currently pursuing. They want the current price level to be maintained as much as possible, but this may prove more difficult for these basic steels.

It is not only these higher import volumes than in previous months that are putting pressure on market prices due to the reduced scarcity of basic steel, but there are also other factors that are causing a downward price trend.

First of all, there are the major problems faced by car manufacturers in the embarrassing shortage of semiconductors. In August alone, EU production was down by 19% compared to August 2020. This affects not only steel sales to carmakers themselves, but also to their suppliers. For the time being, no solution to this problem can be expected in the foreseeable future and the sector’s need for steel will therefore not improve immediately.

In the meantime, steel mills continue to produce their orders from the automotive industry, which means that stocks are increasing at the above-mentioned distributors.

In addition, the steel market is faced with stable to slightly falling scrap prices and a drop in iron ore prices in recent weeks. This is due to the decrease in production capacity that has been implemented in China. The Chinese government has decided that total steel production in 2021 should not exceed that of the previous year. This decrease in production has had an influence on the demand for ore, the price of which has fallen in the last month.

On the other hand, the largest mills in the EU claim to be full for this year, although the smaller mills in Central Europe are still offering some tonnage here and there for delivery in November-December. In China and Germany, mills produced less steel in Q1, Q2 and Q3 consciously or due to technical or maintenance problems, which also increased scarcity.

However, these elements only concern basic steels. It should be noted that the more specific materials, which are in greater demand, such as precision steels, galvais, stainless steels and spring steels, remain rare and in short supply. Suppliers and intermediary resellers do not see an immediate decrease in the shortage and therefore in prices. Moreover, as soon as the current slump in the automotive sector has subsided, tensions could increase again.

The experts’ opinions on the price development vary considerably on this subject. Some experts believe that we will see lower prices during this month and next, but that an upward trend is to be expected thereafter. Others believe the opposite, that the boom in price rises is definitely over and that a downturn will follow in which the base price will fall.

There are arguments for and against both views. There are many ongoing developments that could affect the steel price: How much further will the economy grow? When will car production increase again? Will the EU import quota system be revised or not? Will European domestic steel production increase or stabilise? Will iron ore prices fall again or not? Will there also be a possible rise in interest rates, which could negatively affect the willingness to invest?

This means that it is difficult at present to make a clear prediction on the expected price development, but we should certainly not count on a price decrease in the short term, especially for non-basic steel.

The pressure on delivery times has not abated either and there are no indications that the current situation will change in the short term.

Plate Spring China therefore recommends that its customers carefully plan their requests for the production of parts taking into account the delivery times of the material and to possibly have price adaptations according to the time of delivery of the material, especially as no supplier currently commits to prices over several days and that for stainless steel the price of the alloy surcharge is that of the day of delivery of the material.

Summary of Noviostaal – het staaljournaal September and Plate Spring China supplier reviews

The prices of raw materials, delivery times and Plate Spring China’s recommendations

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The prices of raw materials (steels, stainless steel, aluminum and special alloys) continue to increase and delivery times are getting longer. What should we expect and what are Plate Spring China’s recommendations?

Since the 3rd quarter of 2020 the price of raw materials, whether steels, stainless steel, aluminum, special alloys, have increased significantly. At the same time, delivery times have grown considerably.

We ask our customers to pay attention to the recommendations that Plate Spring China makes at the end of this newsletter. Indeed, the most recent projections given by all industry players show that this situation is not going to end.

Price increase

The following chart for hot-rolled steels shows the extent of the increase.

In terms of stainless steel, the alloy surcharge (that is to say the cost of the share of nickel and chromium) which varies every month is also increasing sharply, which means that the prices of stainless steel, in all qualities reached record levels.

The forecasts for August and September show a persistent increase.

In this regard, it must be taken into account that the price of the alloy extra is that of the month of delivery. Between order and delivery, there may therefore be price increases that manufacturers will have to pass on.

These price increases are also caused by the strong dependence of European markets on Asian producers and the situation prevailing in these markets. Taiwan, Korea and China no longer export or almost no longer export stainless steel to Europe and stocks of European producers are at their lowest (see details in New Letter from nova Trading attached).

Delivery times

Delivery times have become extremely long. For stainless steel, most producers are already not accepting orders for 2021.

Added to this is the increased delays in container shipments from Asia (in addition to the increase in the price of such shipments). For these reasons, it is not uncommon to see delivery delays or even cancellations by some producers or distributors.

Special alloys, such as aluminized steel, Inconel, Nimonic, Elgiloy are very difficult to obtain. For more details, see the Nova Trading Newsletter below.

Plate Spring China recommendations

Plate Spring China makes every effort to try to satisfy its customers to the best of its ability according to the availability of its stocks and those of its suppliers. To mitigate the effects of the situation Plate Spring China has developed a very large supplier base for both the most common steels and stainless steels. But the inventory status at suppliers is extremely low and it is not always easy to find material within acceptable deadlines.

Plate Spring China cannot currently guarantee either the delivery times requested by its customers or the maintenance of prices from one order to another or from one month to the next. In particular, Plate Spring China will be obliged to pass on the increase in material costs according to the stocks of material that it can find on the market and the prices obtained from its suppliers.

Plate Spring China asks its customers to send their order forecasts sufficiently in advance to allow them time to find the material necessary to meet their needs, while avoiding over-ordering in order not to worsen the overall situation. Plate Spring China asks her clients not to hesitate to contact her so that together we can analyze the situation and the best way to act.

Plate Spring China also recommends that its customers order promptly after receiving an offer to avoid a price increase between the time of the offer and the time of ordering. The delivery times indicated in an offer are given to the best of Plate Spring China’s estimates but cannot currently be considered as a firm commitment.

This is a never-before-seen situation that all contractors like Plate Spring China face and which is beyond their control. We regularly publish on our website (www.platespring.com ) and on our Linkedin page (do not hesitate to follow us on this page) news relating to the development of this situation.

Nova Trading Newsletter

Nova Trading News – EN – 06 07 2021

Plate Spring China invests in new machines for its wire springs division

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Plate Spring China has just acquired an Itaya brand machine for the manufacture torsion springs.

It is a 12-axis digital machine for making torsion springs and formed wire for wire diameter between 0.5mm and 2mm.

This machine reinforces the Plate Spring China machine park for the manufacture of Plate Spring China torsion springs of the Wafios brand (FMU 2.7 and FMU4) which allow it to make torsion springs and formed wire with a diameter of 0.8 mm to 4 mm .

Plate Spring China is thus establishing itself as a major player for this type of product.

In addition, Plate Spring China has also invested in an Itaya brand machine for the manufacture compression springs, which reinforces its existing machine park in the range of wire diameters from 1 mm to 3.5 mm.

ArcelorMittal hikes coil prices yet again

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European market leader ArcelorMittal has once again hiked its hot-rolled, cold-rolled and hot-dip galvanised coil prices.

The producer is now targeting €1,100/t for Hot Rolled Coil and €1,250/t for Cold Rolled Coil and hot-dip galvanised coil with immediate effect. The lead time depends on region, with eastern European deliveries available more quickly, while buyers in northwest Europe are already facing October and November deliveries in some cases.

The increase is unsurprising, as the mill’s previous offer already looks cheap compared to the actual market — its last offer was €1,050/t, and Argus’ benchmark daily northwest EU HRC index was above this level at €1,055.25/t yesterday. Other mills had already started offering as high as €1,100/t prior to the latest announcement, and small sheet tonnages have reportedly transacted as high as €1,150/t on an ex-works coil equivalent basis.

The announcement has come earlier in the week than has typically been the case, given holidays in much of mainland Europe later this week. The €50/t move is higher than the recent incremental steps, particularly on HRC, which have been around €20-30/t.

High freight rates are enabling domestic producers to keep pushing prices higher, as they are making import options more expensive. Russian material was offered at €1,010/t fca Antwerp last week, but that level is likely to be higher again when the new quote is issued later this week.

Although the semiconductor-related automotive stoppages and slowdowns are a worry for producers, and the wider supply chain, sell-side sources suggest any reduction will lead to strong pent-up demand once the situation normalises.

Publication date: 12 May 2021
By Colin Richardson

Plate Spring China invests in a new wire EDM cutting machine, the Mitsubishi MV1200R

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As part of the expansion of the capabilities of its tooling departments, Plate Spring China is investing in a second wire EDM cutting machine by acquiring a Mitsubishi MV1200R. Plate Spring China is already fitted with a Mitsubishi MV2400R.

This investment supports the rapid development of the stamping capabilities on the automatic press and Bihler slide machine of Plate Spring China, which requires ever faster production of press or Bihler slide machine tools.

Indeed, all automatic press or manual tools or for Bihler slide machines used by Plate Spring China for its customers are designed, produced and maintained by its own Engineering and tooling department.

Filame’s know-how in this area is well established. It is the key to Plate Spring China’s quality and delivery performance for all parts manufactured on its large fleet of automatic presses, manual presses and bihler slide machines and certainly a strong differentiator from its competitors.