Heat Treat Today publishes eight print magazines a year, and included in each is a letter from the publisher, Doug Glenn. This letter first appeared in December 2023 Medical and Energy Heat Treat print edition.
Feel free to contact Doug at doug@heattreattoday.com if you have a question or comment.
. . . not as bad as predicted. In fact, it was a pretty darn good year for the North American heat treat industry.
Russia and Ukraine
This time last year, there were many predictions about a pending economic slump in varying degrees of severity. Russia’s invasion of Ukraine on February 22, 2022, was front-page news most of 2022. When Russia cut off the flow of natural gas from Russia to Europe through the Nord Stream 1 pipeline in September 2022, Europe, and much of the world, planned on a very cold winter and cooling economies around the world in 2023. While Europe certainly took a hit with energy prices that were sometimes 3x what they had been, most of the rest of the world adjusted quite nicely. Even the
United States did well in 2023 despite our federal government’s insistence on reducing and eliminating petroleum-based flows of energy which are in abundant supply.
Titanium supplies were also predicted to take a huge hit with Russia being one of the chief suppliers. But since a May 2022 high of roughly $19/ kg, the price of titanium has been dropping steadily back into a pre-conflict price of roughly $6/kg. Only $2/kg higher than the average price of titanium from 2017 to 2022. Not bad.
Of course, the macro effects of the billions of dollars that the U.S. has sent to Ukraine remain to be seen; in economic terms, 2023 turned out to be not as bad as predicted when it comes to the Russia-Ukraine conflict, at least for the U.S.
2023 Recession . . . that Wasn’t
Thanks to the U.S. federal government’s now widely agreed upon over-reaction to COVID in the form of “quantitative easing” (meaning pumping the economy full of money created out of thin air), nearly everyone in 2022 was predicting a significant economic recession in 2023. It was just a matter of when, not if. At the time of writing this (early November), it doesn’t appear likely that the U.S. will see a recession in the remaining months of the year. In fact, most of the company leaders that I’ve spoken to this year have reported (surprisingly) strong orders, growing backlogs, and very little signs of slowing inquiry levels. Nearly everyone is busy with no end in sight. Even in the face of rising interest rates — the highest in nearly 30 years — capital equipment purchases seem to be clipping along very nicely. Everyone is surprised, but happy.
Israel, AI, and Other Disruptors
That’s not to say the world and the North American heat treat market’s place in the world is all roses. It is not. 2024 will have its own list of significant
challenges, not the least of which is growing global instability à la China, Iran, Russia, Israel, etc. and the U.S.’s participation therewith. The advent of digital currencies could be another disruptor. Artificial Intelligence (AI) seems to be approaching at warp speed — no one is quite sure what it is, but we’re all pretty sure it will have an impact.
Regardless of what God has in store for us in 2024, 2023 has certainly not been as bad as it was predicted to be in December 2022. For that we can be thankful. And for 2024, let’s be optimistic and prayerful that God will again be merciful and not reward us as we deserve!
All of us at Heat Treat Today wish you, your family, and your business a Merry Christmas and a blessed and prosperous 2024.
