December 18, 2020
To Penco’s valued customers,
In a year marked by unprecedented challenges as well as calls for reform of many of our institutions, I want to share with you news of market dynamics that we are confronting. The market for steel is undergoing rapid change. Since August of this year, the price of steel has increased by more than 60%. In addition, the supply of steel is extremely tight. Demand from the automotive industry has increased significantly. Mills have taken capacity off-line. The combination of increased demand and decreased supply is causing supply shortages unlike any seen in recent memory. Steel mills are limiting orders they will accept and turning away orders for future months. Suppliers are voiding steel contracts with their customers. Mills have extended lead times and are frequently running 4 weeks behind on deliveries.
We are doing all that we can to maintain integrity of supply but we may experience supply disruptions. Our suppliers are telling us that this situation may last as long as 6 months. Steel pricing and supply are keeping many of us awake at night.
After the first of the year, we will be in communication as steel market dynamics further unfold. We are committed to working through this situation so I ask for your patience as we do all that we can to maintain your trust and continue to be a valued supplier.
My best wishes for the joy of this holiday season to you, your family and your co-workers. I look forward to 2021 with optimism and commitment to tackle the challenges we will encounter.
With Kind Regards,
President and CEO
Penco Products, Inc.