To Our Valued Ulbrich Customer,
2021 is over, and we do not anticipate a significant shift in 2022 relative to the availability of materials. Our customers' ability to provide accurate forecasts and anticipated demand remain critical as we try to ensure there will be no interruption in supply.
Section 232 continues to restrict steel and aluminum imports into the U.S., particularly for vendors outside of Europe. A tariff-rate quota system has replaced the Section 232 tariff on metals from Europe. European mills remain focused on servicing their European customers, similar to how things continue to be managed by the melt mills domestically.
ATI cutting back on North American capacity for stainless steel was another game-changer. Given the current high demand, domestic mills have been focusing on throughput and utilization. They're emphasizing production of the more common, higher volume materials and melting less of the specialty alloys and grades. Stainless order entry continues to be managed by the mills via monthly allocations.
SMC is currently on strike, impacting the availability of Special Metals such as nickel-based alloys. With restricted supply and increasing demand, prices are rising, and lead times have been pushed out to 30-35 weeks. Aerospace demand has remained low; however, it is starting to shift and will only increase the need for these grades.
With stainless steel and other alloys on allocations, we are working to ensure we have enough material for our long-standing customers. In some situations, we may be able to bring in extra material for spot orders. Ulbrich staff will continue to communicate to understand our customers' expected demand.
We appreciate your business and hope to have a year of less chaos.
President Distribution Group