“In this world, nothing is certain except death and taxes”
I used to think “sanitary tubing will be in stock” was also a sure bet. After all, in years past we’ve been known to have miles and miles of tubing sitting in crates ready to ship to customers.
However, recently we have seen stockpiles depleted and to make matters worse the lead times for new tubing orders can be as long as 6 – 8 weeks…if we’re lucky.
So to quote the great Vince Lombardi:
We decided to reach out to Mike Lovelace, Sales Manager at Steel & O’Brien, to find out exactly that.
John Zabkowicz [Sanitary Fittings]: Mike, first of all, can you tell us a little bit about the domestic market for sanitary tubing?
Mike Lovelace [Steel & O’Brien]: Sure. So all the sanitary tubing produced within the United States is coming from one of two manufacturers: Rath Gibson and United Industries. These two companies not only produce sanitary tubing used within the food, beverage, and pharma industries but also tubing and piping for the automotive, HVAC, and several other industries as well.
John: So what has changed within the US Domestic market to cause the current situation of long lead times and lack of supply?
Mike: We’re facing a perfect storm at the moment. For starters, we have a lot of pent-up demand due to COVID-19. A lot of companies pushed off major projects during 2020 and now that backlog of work has hit us like a hurricane.
To make matters worse, a major strip manufacturer that provides roughly 30% of the raw material for tubing has stopped making 304 and 316L. This has left tube manufacturers with no way to produce tubing.
Historically, tubing within the sanitary world has very thin margins. So when these companies get inundated with work sometimes they re-examine production lines and focus their efforts where they can make the most money.
John: Do you see this as a short-term issue, or is this the new normal?
Mike: It will get better but it’s going to take months. I’m predicting summer before we finally get back on track.
John: What about alternative sources of raw material, or tubing, outside of the United States? Is that even a possibility?
Mike: I certainly hope not but demand is not going anywhere and companies are resourceful so it’s certainly possible. You have to keep in mind the size and weight of both the raw material and the finished product of sanitary tubing. It’s big, it’s bulky and it’s heavy. The cost of importing this product would destroy the thin margins that exist with tubing.
John: Fair enough, Mike. Thank you for your time today. I really appreciate you sharing this information with us. It will be interesting to see how customers of sanitary tubing adapt to this situation over the next couple of months.
Sanitary Fittings will do its best to provide accurate shipping dates to customers that order tubing over the next couple of months. We sincerely appreciate your patience during this time. If you have any additional questions, please contact us.