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Strong defense gives rise to strong demand: with war and turmoil on so many fronts around the globe, U.S. defense contractors--and their metals suppliers--are busy keeping the military in a state of readiness.

Article Excerpt
WITH WAR AND UNREST the sad rule around the world, service centers that supply metals to the defense industry are in the middle of a growth period with no end in sight. U.S. government defense spending is expected to continue increasing for at least the next two years, and possibly longer, though perhaps at a slower rate.

"The actual federal government [budget] projections call for an increase through 2011, which is calendar year 2012-13," says Robert Aboulafia, vice president of analysis at Teal Group Corp., a Fairfax, Va.-based firm specializing in aviation and defense issues. "It just isn't going to be at the same double-digit pace it's been the last several years."

Where the new spending will go is a question, but one with an answer that seems favorable to metals distributors. Aboulafia anticipates some of the money earmarked for procurement of fighters, missiles and other new purchases may be shifted to maintenance and overhaul. While government contractors acquire much of their metal mill-direct, service centers are actively involved in supplying providers of maintenance material and spare parts.

"Rather than replacing, they tend to repair and enhance their existing platforms with new avionics," says Bob Mraz, vice president of sales and marketing for TW Metals. "As a result, the maintenance and repair elements are that much greater. And it will continue as long as there's a need to maintain an effective fighting force, which appears to be forever."

TW Metals has a sizable presence in the defense market, providing a variety of metals...

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