Wire Filaments: Brush Manufacturer Market Update Part I
PART I: Wire Brush Manufacturers
By Bob Lawrence
Ask anyone outside the brush industry what wire brushes are used for and most will cite menial tasks such as grill cleaning, having no realization that they’re essential in most major industries producing products and services ubiquitous in their lives, from aerospace and automotive to agriculture and telecommunications. As such, it’s a high-growth segment of the brush industry, according to a July 2023 Business Research Insights analysis of the global wire brush market. The findings: it’s expected to grow from over $553 million (USD) now to $784 million at a compound annual growth rate of six percent by 2028. This bodes well for wire filament producers and distributors as well as wire brush manufacturers, both of which are, and have been, dealing with all the major issues associated with doing business in their home countries and globally. To gain insight from their perspective, Brushware posed questions in a two-part article. In Part I, we have a conversation with three prominent brush manufacturers on the wire brush market.
What was the status of raw wire material availability for your company in 2022 and how has it been so far in 2023?
Ken Rakusin, president & chief executive officer, Gordon Brush, USA, speaking for the 12 brush and other companies under his company’s umbrella: Gordon Brush and our sister companies were able to work during 2022 and six months into 2023 without any issues with wire availability.
Tony Ponikvar, president & chief executive officer, Felton Brushes, Hamilton, Ontario, Canada: In 2022 wire supply was tight, and this year it’s been 26-week lead times with prices jumping by 30 percent.
Chip Preston, Spiral Brushes Inc.: We buy crimped and level wire in a few grades of steel, stainless steel, brass and bronze, and in multiple diameters from 0.003” up to 0.030”. Prices and lead times began increasing back in mid-2021, accelerated through most of 2022, and finally began to moderate in late 2022 into early 2023.
What do you think availability will be for the remainder of the year as well as going into 2024?
Tony Ponikvar: I think that if you order simple product and add the value of crimping or end collection in-house you will be in much better shape than relying on other companies for this service. There are not many of them left to do this work.
Ken Rakusin: There is nothing on the horizon that looks like 2024 will be an issue.
Chip Preston: Availability has been improving as alternative sources from outside the United States have been developed by the value-added domestic suppliers who provide services such as draw, crimp, bunch, straighten and cut to length.
What are the primary source countries for the raw wire material you purchase?
Ken Rakusin: The majority of the wire we source is domestic but we believe that the actual origin is somewhere overseas.
Tony Ponikvar: USA I like to think, but I see that it has been increasing in numbers from the Orient. It appears that Beakart and others have bought up the smaller players and consolidation has occurred in the industry.
Chip Preston: It seems like China, India and Korea have become significant sources of wires that perform competitively against the power brush wire that has been historically made in the United States.
When buying raw material, do you stay with particular providers or do you shop the global markets?
Tony Ponikvar: As a small to medium player we are very loyal to our suppliers as the quality is the number one concern and saving some money is not worth the consequences of losing a customer on a purchasing error.
Ken Rakusin: We typically stay with one provider as most changes in fill material mean that the brush-making machines need to be adjusted. Sometimes this is easy but other times we waste too much time and create too much scrap trying to get the machines to work with different materials.
Chip Preston: We do not shop the global markets, because our requirements are smaller than what an exporter might want to economically ship. We also rely on the services of domestic suppliers to crimp and strand to a variety of specifications based on the wire diameter. A number of our domestic suppliers have been buying material from international sources for final processing in the U.S.
A June report by Reuters’ Beijing bureau says China is set to export the most steel this year since 2016 due to the weakening yuan, competitive prices, and weak demand in that country. In the first five months of this year, Chinese Steel exports were up 41 percent compared to a year ago. Given that, do you expect lower prices for China steels will trickle down and impact brush wire?
Ken Rakusin: Interesting observations. We know price is always a factor but quality and delivery are more significant to us. We’re constantly reviewing costs from our suppliers and will wait and see what happens.
Tony Ponikvar: I hope so. That is a question for wire distributors. It seems that prices never come down. We will be lobbying for a decrease though. It makes sense that it does.
Chip Preston: Some price relief has begun to materialize in 2023.
What was happening to the price of raw wire materials in 2022 and how have prices been this year, and what accounts for that?
Tony Ponikvar: Not sure. But it was explained that supply was so tight that prices were going up.
Ken Rakusin: We didn’t notice a major change with wire prices over the last 18 months or so.
Chip Preston: Prices for brush wire from our domestic sources increased dramatically in 2022, possibly due to supply chain constraints and shortage pricing, as well as the effects of higher material and labor costs driving up the total price and margin dollars in an effort to maintain percentage return on sales.
Where do you see raw wire materials prices going from now and on through the next year and why?
Ken Rakusin: We are unaware of any reasons for pricing to dramatically change.
Tony Ponikvar: I expect them to stay steady, as there is always a reluctance to lower prices by our suppliers. I think it may be a good time to shop around though to see if there are deals.
Chip Preston: We would expect that prices will continue to moderate as supply chain capacity constraints are resolved, and greater availability and shorter lead times should re-introduce greater competition — in effect a shift from shortage to a surplus of brush wire in the market.
During this year have there been any impediments to acquiring raw wire material to produce wire brush products?
Tony Ponikvar: We have still experienced supply issues, but not chokingly as it was two years ago.
Ken Rakusin: 2023 has been pretty simple for wire purchases as supply and prices have been consistent.
Chip Preston: Yes, delayed shipments of brush wire have negatively affected our own lead times for our customers, stretching deliveries to 13 weeks from a previously normal 6-8 week manufacturing lead time for our products.
How did you overcome those issues?
Tony Ponikvar: We begged and we have relationships with key suppliers who respect us and likewise. Suppliers are very important and you want to befriend them, and they will do what they can to help you.
Chip Preston: We were forced to qualify new suppliers to improve our lead times and to offset the pricing power of our primary wire suppliers. Once we had qualified new suppliers, we began to tell our previously dominant suppliers that their quoted prices and extended lead times were not competitive.
Do you think it would be advantageous for supply chains to shift to more countries, and if so what would be the impact?
Ken Rakusin: We rely on our vendors to source raw materials as they need so this isn’t an area that we are familiar with.
Tony Ponikvar: I would rather it all be in the USA and Canada, as quality is mostly ensured. That being said, other countries where labor is low and abundant could offer
price relief.
Chip Preston: As I noted earlier, the domestic processors and resellers of brush wire have already expanded their sources of supply to diverse countries outside of the U.S. More foreign sources introduce greater purchasing options, but also introduce issues of foreign exchange rate changes and
shipping logistics.
What was the demand for wire brushes in the past two years and what has been the demand throughout this year?
Tony Ponikvar: We have been steady to an increase, due to hard work and winning business in the marketplace for us. I look forward to answers from others in the industry, as we keep our heads down and are not really aware of the overall trend in the industry.
Ken Rakusin: Our demand continues to grow each year as our business increases in scope and size.
Chip Preston: Over the past 2 years, demand decreased somewhat as the result of shifts in consumer demand during the COVID-19 pandemic, as well as temporary shutdowns of certain industries in the first quarter of 2020. Demand has surged back this year (2023), and business has returned to
2019 levels.
What do you anticipate demand will be during the next two years or more?
Tony Ponikvar: I am optimistic. Cautiously though. I predict a five percent increase in the market for our brushes.
Ken Rakusin: We expect to see increased growth going forward as our product and customer base continue to expand.
Chip Preston: We expect continued moderate growth over the next few years.
Where are prices today compared to the past two years?
Ken Rakusin: All pricing has increased from two years ago because labor rates increased dramatically as well as every other cost factor.
Tony Ponikvar: Brush prices are up seven percent I would say.
Chip Preston: Prices for finished brush products increased significantly during 2021 and 2022 as the result of higher input costs. Prices remain elevated in 2023 because cost-push inflation may have slowed down, but for the most part, price deflation has not yet hit our various inputs to
brush manufacturing.
Regarding the previous question, what is the cause for that?
Tony Ponikvar: Brush companies passed on increases, and perhaps a penny more to keep ahead, and customers for the most part understood it, for once in a long time.
Ken Rakusin: This is one of those million-dollar questions that even the best economists might struggle to answer. As interest rates rise, health insurance increases, oil prices remain high and minimum wages across the country rise, prices will increase.
Chip Preston: We are closely monitoring changes in the costs of materials for our products, including brush wire, but also a multitude of other metal components. To date, we have not seen sufficient moderation of the high prices demanded by our supplier base. Also, the higher costs are built into a broad swath of our raw materials inventory, and we have to use up the higher cost inventories first, before any sort of pricing flexibility returns.
Where do you see wire brush prices going in 2024?
Ken Rakusin: My best guess is that prices will increase next year as inflation is still a major factor in pricing.
Tony Ponikvar: I think up 2-3 percent with labor becoming the biggest issue.
Chip Preston: Difficult to forecast, but will be “data dependent.”
Have there been increases in production costs during this year and last, such as wage and energy cost increases, and what
do you anticipate regarding such issues over the next two years or so?
Tony Ponikvar: Increases for us have been 8 percent on labor and same for most inputs.
Ken Rakusin: Cleaning off my crystal ball, there is nothing I’ve seen that suggests that pricing will stop increasing.
Chip Preston: Yes, production costs have increased, as raw materials costs rose sharply with the “re-opening of the U.S. economy” and the shortages that resulted from that upswing. Similar dynamics also affected the labor markets, as starting wages had to rise fairly significantly to attract the attention of the insufficient quantity of persons looking for work in a manufacturing environment. Finally, service providers have also begun to push up their prices to reflect their own labor and operating cost pressures.
Has inflation had an impact on any phase of your business?
Ken Rakusin: Inflation is why all our costs have increased.
Tony Ponikvar: Yes.
Chip Preston: All of the above are forms of inflation. What matters in the long run is how the current higher prices draw in more sources of supply, so that more competition is restored and costs come back down.
What impact or ramifications has any of the above had on your customers?
Tony Ponikvar: Their demand has increased so I think not so much.
Ken Rakusin: Most of our customers understand the inflationary effect on our pricing. Some are ordering in larger quantities to take advantage of volume discounts but most seem okay.
Chip Preston: For a while in late 2021 and early 2022, the predominant response that we heard from customers was — “Everybody else is raising prices, so go ahead and do what you need to do to remain profitable.” We expect that most of our customers were able to pass through the higher prices.
What are the dominant wires used in your wire brush production?
Ken Rakusin: We use a lot of stainless steel, high carbon steel and brass in our brushes, and this dates to our founding in 1951. I see no reason for any change as we move forward.
Chip Preston: Steel, Brass, Stainless Steel.
Other than the brush industry, what other industries use your wire brush products?
Tony Ponikvar: Automotive, pharmaceuticals, food, aerospace, transit and transportation, military, etc.
Ken Rakusin: Based on our sales to our fantastic distributor base and other brush manufacturers, our products are used in every industry imaginable including having been sent to the Moon and Mars.
RESOURCES
Part II: Wire Filament Suppliers Update
Gordon Brush: www.gordonbrush.com
Felton Brush: www.feltonbrushes.com
Spiral Brush: www.spiralbrushes.com
