Piping & Equipment, Inc.

A-D is a world class marketing organization made up of three separate divisions; the Electrical Supply Division (founded in 1981), the Industrial Supply Division (founded in 1994), and the Industrial Pipe, Valve and Fittings Division (established in 1995). Without exception, A-D Affiliates are independent, entrepreneurial distributors who are leaders in their local and/or regional trading areas, professionally managed, market oriented, and financially strong.

They offer marketing programs and expertise, sophisticated forums for intra-organization communications, high level relationships with leading manufacturers, innovative technical solutions, and executive sales support. A-D’s National and Regional Account Programs for commercial, institutional, and industrial customers offer superior, customized services at a competitive price. The effectiveness of the working partnerships forged between the Affiliate, the A-D supporting manufacturers and the customer inevitably results in productivity and profitability gains for the customer.

A-D offers reduced procurement costs for industrial customers with multiple facilities and diverse product needs using A-D’s family of proprietary software applications called A-D Edge ®. These Windows based software applications track purchasing, shipping and inventory of MRO materials for single and multi-plant facilities. This product is regarded as the most powerful requisitioning tool in the manufacturing and distribution industry today.

A-D’s solid mission, unique structure, and sound principles enhance the strength of knowledgeable and devoted independent distributors who offer name-brand products and superior service. For most industrial customers, A-D divisions cover over 70% of MRO product requirements. Through the utilization of the following resources, A-D is able to service product and needs using:

• A-D Supplier Relations
  • A-D Marketing Programs
    • Networking
      • A-D’s Commercial Sales and Service Program
        • A-D’s Industrial Sales and Services for Integrated Supply
          • A-D’s Technology Resources

STAINLESS STEEL PIPE

Pricing- Manufacturers report mixed predictions on pricing trends from 1% – 2 1 /2 % down to 1 – 5% up. One manufacturer reports 1 – 2 1 /2 % down due to low cost foreign coils entering the market. However, several report from 1% to 5% increases from raw material costs. One manufacturer comment was "nowhere to go but up" with the current levelsbeing unsustainable.

Lead Times – There appears to be unusually high inventories at the mill level with 60% to 90% of commodity items shipping from stock. Lead times for commodity items if not in stock are 3 to 6 weeks. Specialty items are shipping in 8 – 12 weeks, with one manufacturer reporting

Comments – A flood of imports combined with plenty of domestic capacity has created a depressed market for pricing all this year. The results of the final review of Ta Chen’s activities are not yet concluded. Temporary findings on the two stainless flat rolled cases are due between late October and early November. Through the first seven months of 1998, pipe imports are up 38% compared to the same period in 1997. Raw material pricing on nickel went from $1.964 in July to $1.852 per lb. in August ’98. Moly pricing slipped from $3.756 to $3.30 per lb. over the same period.

STAINLESS STEEL WELD FITTINGS

Lead Times – Commodity shipments are 2 – 3 weeks, with fill rates of 80% – 90%. Large OD fittings are running approximately 4 weeks, with few exceptions. Deliveries for specials are 2 – 6 weeks. Some specials  have actually  improved

Comments – Some manufacturers have a dumping suit. This may have an influence on both pipe and fittings in the next 6 – 8 months. Ta Chen is the major influence on foreign stainless fittings. They currently are the people to beat, but more foreign product will probably be coming. Look for continuous increases in strip and very possibly a cutback of 25% on manufacturing time for strip. This and the dumping suit may force the prices up after the first of the year.

STAINLESS 150 AND HI-PRESSURE FITTINGS

Lead Times –The forecast for lead times is 1 – 3 weeks. There are fewer projects; therefore,  manufacturers are building more complete

Comments – Increasing foreign competition from the Far East, Europe and Africa! Nickel is at a 10 year low. Some production cuts are underway worldwide, which could move prices upward.

STAINLESS STEEL FLANGES

Pricing - Manufacturers report pricing forecast to be from 1% to 5% down with demand, competition, supply, foreign pressure, and raw material costs pushing the downward trend.

Comments – One manufacturer noted that the market normally firms up in the last quarter after the summer doldrums. However, the Asian crisis is the wild card! Foreign competition continues to be strong.

CARBON STEEL PIPE (CONTINUOUS WELD)

Lead Times – Lead times for stock items are 1 to 3 weeks with fill rates of 90% to 100%. Some minor inventory shortages were reported at a few mills. Lead times for specials are 2–3 weeks.

Comments – Several dumping suits are in effect now. Many Asian countries are reportedly trying to dump pipe into the U.S. Foreign competition is increasing from South Africa, Canada, Mexico, Korea and Japan. Ferrous scrap for flat rolled steel (welded pipe raw material) is going down with a $20 – $30 per ton reduction during the past six months.

CARBON STEEL PIPE (ERW & SEAMLESS)

Lead Times – Fill rates for commodity items is 60% to 80%, with lead times running 4 to 8 weeks. Larger OD’s (14" and 16") will extend as far as three to four months.

Comments – There are threats that the U.S. will file dumping suits on Japan, South Africa, Romania, and the Czech Republic very soon regarding dumping suits. Manufacturers report that foreign competition from Japan is back, and we should look for foreign seamless prices to decrease during the 1 st quarter of 1999.

CARBON STEEL WELD FITTINGS AND FLANGES

Lead Times – Lead times are running from 1 to 6 weeks for commodity items from stock with 60% to 90% fill rates.  Demand is reported to be softer.

Comments – It is reported that foreign competition continues to increase, but domestic suppliers are holding prices. Reports indicate continued increase in foreign competition from Japan, Korea, Taiwan, Italy, India, Mexico, Thailand, and Malaysia.

FORGED STEEL FITTINGS

Lead Times – The lead times for commodity forged steel fittings is 2 – 3 weeks and 1 – 2 weeks for nipples. The overall inventory is going up, which is providing for better service.

Comments – The foreign competition for forged steel fittings and couplings is increasing from Europe.

STAINLESS GATES, GLOBES, CHECKS

Pricing   The forecast from manufacturers for this quarter is for no price change.

Lead Times –   Manufacturers  report  lead time  on commodity shipments of 6 – 8 weeks, and fill rates of 90  to 100% from stock. Exotic lead times are reported from 4 – 6 weeks with

Comments – The report on foreign imports remains steady.

FORGED STEEL GATES, GLOBES, CHECKS

Lead Times – Deliveries are 2 – 3 weeks. Fill rates of 90% – 100% for commodity items. Lead times for non-stock special items are running approximately 4 to 6 weeks.

Comments – Foreign competition is reportedly increasing from Italy and China.

BRONZE AND IRON GATES, GLOBES, CHECKS

Lead Times – Deliveries continue at 3 to 4

Comments – No change in this market over the prior quarter.

CAST STEEL GATES, GLOBES, CHECKS

Lead Times – Cast Steel valve deliveries

Comments – Manufacturers report no change in pricing, but they indicate that they are getting pressure from their vendors.

QUARTER TURN VALVES — BALL AND WAFER

Lead Times – Commodity item deliveries are shipping in 2 – 3 weeks. One manufacturer reports 70% of commodity items shipping in 1 – 2 weeks, with the balance shipping in 4 – 6 weeks.

Comments – Foreign competition is increasing from the Far East and Italy.