Metal Stamping Equipment & Machines
Date March 2021
- Gordon Brothers’ recent market research indicates the market for stamping presses is relatively flat.
- Recent research indicates late model presses continue to be the most desirable of all press sizes.
- High-tonnage transfer presses have seen increased inquiries in 2021 from the soft market in 2020; however, current levels remain lower than 2019 inquiries.
- Auction results continue to be lower than pre-pandemic prices, and orderly liquidations have seen extended time frames taking up to 12 months to sell equipment.
Auto Manufacturing and Steel Markets Directly Affect Industry: An estimated two-thirds of the metal stamping industry’s products are made of ferrous metals such as iron and steel alloys. High steel prices raise input purchase costs, but they also boost the value of end-product inventory. Conversely, inventory is devalued when steel prices drop, hurting selling prices and revenue.
Rising steel prices are generally favorable to this industry’s performance because they indicate growing demand from the industry’s key markets. Steel prices increased steadily throughout 2020, and in 2021 have reached highs last seen in 2018. As of March 2021, we have seen a return to robust pricing across steel categories in the Midwest including hot rolled coil prices up over 110% since March 2020, cold rolled coil and plate steel prices both up over 85% for the same period.
Gordon Brothers’ recent market research indicates the market for stamping presses is relatively flat. While the market is segmented, the state of the auto industry has long been a significant driver within the stamping market. Total seasonally adjusted vehicle unit sales in the U.S. were down 1% and approximately 6% for January and February 2021, respectively, over 2020. However, sales projections for automobile production in 2021 from the National Automobile Dealers Association and Cox Automotive predict increases ranging from 7% to 8% over 2020 sales levels. The positive forecast has not led to increased sales activity within the press market as of March 2021, but an increase in annual auto sales would benefit the overall market.
Value Trends Vary by Size Class: There can be distinct value trends based on equipment specifications within the metal stamping machinery market. As an example, the current market for higher tonnage machines with 1,000+ ton capacities, has improved over 2020 as demand from the automotive segment, which drives a significant percentage of manufacturing demand for larger presses, is seeing increased activity. However, this increased activity has not resulted in increased sales as of March 2021.
Recent research indicates late model presses continue to be the most desirable within all press sizes. High-tonnage transfer presses have seen increased inquiries in 2021 compared to the soft market in 2020, however current levels are still lower than 2019 inquiries. Current values for late model medium tonnage machines, around 400- to 600-ton capacities, continue to yield stable results, as this equipment is typically in higher demand because of its ability to be used for smaller precision stamping piecework. Servo presses tend to be desirable, however they have a very limited installed base compared to mechanical and hydraulic presses and, as such, fewer end users are looking to add capacity. Presses of all sizes more than 20 years old have continued to see decreased values, as buyers move towards later model presses. According to industry sources, prices for new presses have increased, mainly because of increases in raw materials. Lead times have been consistent; however, shipping delays have started to become a factor and are adding costs to the presses.
For lenders seeking valuations on specialized equipment across a broad range of sizes it is important to consider asking detailed questions about machine specifications to understand the implications of changes in value within equipment segments.
Specifications of Metal Stamping Presses Drive Values: Components made by stamping presses are created by blanking, piercing or punching, forming, bending and drawing or otherwise manipulating metal in sheet or coil form between the upper and lower halves of a die. The upper portion is attached to the slide of the press, and the lower portion is clamped or bolted to the bed or bolster. The die is designed to create the shape and size of the component.
The specifications of presses drive their desirability and value. There are two main drive types: hydraulic and mechanical. While other types of presses exist, such as pneumatic and servo, hydraulic and mechanical are the most common in key markets. Hydraulic stamping presses are driven or powered by a hydraulic cylinder. They have fewer internal components and more constant press force during each stroke. Additionally, hydraulic presses offer more reliability than mechanical presses but cannot match the operating speed of a mechanical press. Mechanical metal stamping presses are driven by a rotary motor through a screw, toggle, lever or other device.
Another key specification is a machine’s capacity. The rated capacity of a press is typically determined by the tonnage pressure. Its stroke size or strokes per minute measures the distance and time it takes for the ram to travel from top to bottom. Appraisers also consider machines’ bolster or bed size and the capacity of any slide adjustments. Single-acting presses have a single ram while double-acting presses have a subdivided ram. Triple-acting presses exist but are seldom used.
There are a variety of control types used across different machines. Automatic or indexing machines automatically load the parts into the system and operate independently. Additionally, CNC, PC or PLC controls may be present enabling programing. Some machines remain manually controlled through a push button, pendent or foot control. Appraisers find tonnage, type, bed size, controls and age typically have the greatest influence on press values.
High Tonnage Machines Warrant Special Appraisal Considerations: Metal stamping presses are available in a wide variety of capacities. Presses in the 100- to 500-ton range are very common and readily transact on the secondary market. However, lenders should be aware larger presses, particularly those with capacities of more than 1,000 tons, are substantial machines with a much more limited market and may warrant special appraisal considerations. Buyers of larger presses, more likely used by manufacturers of very large metal parts such as automotive, appliance or HVAC, may incur significant expenses to remove machines.
Since these larger presses are often pit-mounted or have special flooring support, buyers may also need to factor in the cost of necessary building repairs after removal. These are important considerations that could result in lower values in a removal scenario. Lenders looking to collateralize these types of machines should consult with an experienced appraiser to understand the appropriateness of other value definitions that value machines in place. Evaluating assets in this manner can result in higher recoveries if the evaluation reflects a realistic exit strategy.
Support Equipment Adds Value: Some stamping lines may have support equipment that adds to the overall value. For example, an uncoiler may be installed to hold and safely pay off or uncoil steel strip. A straightener may be present to remove coil set from the material, allowing it to pass unrestricted through the die. A feeder may be set up next to the press to load the machine. This combination of equipment can add to a line’s total value. Lenders should look for detailed listings of support equipment within press groupings. While items may not be valued individually, lenders should be aware of the potential to sell these items piecemeal should the entire line not sell in liquidation.
Note: THIS PUBLICATION IS PROVIDED FOR INFORMATIONAL MARKETING PURPOSES ONLY. THE MATERIAL CONTAINED HEREIN SHOULD NOT BE REGARDED AS ADVICE, NOR RELIED UPON TO MAKE FINANCIAL, OPERATIONAL OR OTHER DECISIONS; NOR SHOULD IT BE USED AS A SUBSTITUTE FOR AN ASSET APPRAISAL. ACTUAL RECOVERY VALUES MAY VARY FROM TRANSACTION TO TRANSACTION AND THE RECOVERY VALUES REFERENCED HEREIN ARE FOR REPRESENTATIVE TRANSACTIONS WITHOUT REGARD TO SPECIFIC KEY FACTORS. THIS MATERIAL MAY BE REDISTRIBUTED ONLY IN ITS ENTIRETY, INCLUDING NOTICE OF COPYRIGHT. ALL RIGHTS RESERVED. ©2021 GORDON BROTHERS, LLC.
Reference sources: CENTER FOR AUTOMOTIVE RESEARCH, FEDERAL RESERVE ECONOMIC DATA, S&P GLOBAL PLATTS, IBISWORLD, COX AUTOMOTIVE, NATIONAL AUTOMOBILE DEALERS ASSOCIATION