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How this metal foundry grew its business during the pandemic

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Trains with scrap metal stay in front of the Huettenwerk Krupp Mannesmann GmbH steel mill on March 5, 2018 in Duisburg, Germany.

Prices for aluminum base scrap picked up 9.7% from August to September. Lukas Schulze via Getty Images

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My Economy” tells the story of the new economic normal through the eyes of people trying to make it, because we know the only numbers that really matter are the ones in your economy.

Aluminum prices are surging to multiyear highs, and aluminum base scrap prices increased 9.7% from August to September.

Adam Schaller, vice president of Lakeshore Die Cast in Baroda, Michigan, is keeping a close eye on rising metals prices. His manufacturing business works with aluminum and zinc ingot, which is injected at high pressure into metal molds to produce goods. The finished products are used in industry, consumer products, you name it.

Schaller said that in the beginning of the pandemic, his business was running at a loss as his customers stopped putting in orders for his products.

“We were producing goods, not selling goods, basically just piling up inventory,” Schaller said.

By June 2020, business had started to return. By August 2020, business surpassed sales by 25% to 30% compared to August 2019.

“We supply a lot of parts and pieces to the construction industry, contractors,” Schaller said. “So, as soon as people kind of realized they were stuck at home, and they couldn’t spend their money on travel and vacation and things like that, and started doing home improvement projects, the customers that we supply in those sectors, their demand really took off.”

Schaller said the jump in prices for aluminum and zinc was the largest he’d seen in his decade-long career.  

“There was almost no demand and a bunch of supply, and so prices on everything from aluminum ingot to natural gas dropped to about 50% of their typical level,” Schaller said. “Now, they’re almost one-and-a-half, maybe two times their historical level, in a lot of cases.”

With these price hikes, Schaller’s had to make the decision to pass the price increases on to his customers.

“That’s been difficult, having to talk with our customers — sometimes monthly — and raise prices,” Schaller said. “So, as far as what’s good for us, because international shipping is so backed up in the short term, there’s not any other option other than domestic manufacturing. So that’s given us pricing power, we can raise our prices to our customers, and you can bargain a little bit.”

With the increased business during the pandemic, Schaller said he’s increased his staff and he’s looking forward to future growth for his company.  

“We’re definitely planning on expanding — I think we’re well positioned to do more work,” he said. “I’m pretty optimistic.”

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