January 1, 2009

To All Our Customers:

Since our last letter just about thirty days ago, we have made great strides securing new relationships and firming up our current relationships with regard to purchasing steel for flanges.  With that in mind, we enclose our new printed price sheet No. 109, effective January 5, 2009, with most changes in Class 300 and Class 600 flanges.  The same discount and freight allowance is in effect at this time.

The price for scrap that we were getting for half of October and all of November was zero.  For the month of December, scrap prices have again started to climb, and although not where they were six months ago, they are at a more normal rate.  We understand also that in Canada and India, scrap prices have now gone up in those areas from the same levels that they were here in America.  Seamless pipe on the other hand has changed very little, but it has changed.

I wrote you at the end of November telling you that the European seamless pipe makers had all announced a price increase for the 1^st of January, 2009.  We are now told that increase has been rescinded.  Also, a major U.S. seamless pipe maker, we are told, has rolled back their prices $200 a ton.  That pipe now would be more in line with the other domestic pipe makers.  We did not pass that increase on to our customers when it was initiated around October, 2008.  At this time, there is no price change for fittings. 

Until the middle of January, I don’t think any domestic manufacturer will have a good handle on what the pipe situation will be for the first quarter of 2009, and we will see what develops at that point.  Customers call us and ask us how we think 2009 will be.  Again with no crystal ball, we think that generally 2009 should be a fairly good year, with the first four months probably a little tighter than the rest of the year.  There are still projects starting up and being completed, and for welding fittings and flanges we think it should be a decent year, but not at the fevered rate of 2008.  The verdict is still out for 2010, and again with no crystal ball to tell us what will happen, but with the new president and new ideas on how to jump start the economy, we hope brisk business continues.  Weldbend is still very bullish in its approach to modernization of equipment.  We have just finished receiving two new pieces of equipment which were ordered in June, 2008, and we are waiting for a third, for the increased production of flanges, with a decrease in costs.  In addition, in the last weeks of December we placed an order for approximately $2-1/2 million for additional flange making equipment that will be delivered about July, 2009, which again reduces the cost of making flanges.  With additional projects in the wings, we think America is the best place in the world to do business, and we will continue to invest in America.

We want to thank everyone who helped make 2008 a banner year for Weldbend, all the kindnesses shown to us throughout the year, and your understanding during some of the frenzied periods of that year.  We wish good health and happiness for your families, and good business and prosperity for all in 2009.

James J. Coulas, Jr.
President

You can depend on Weldbend!

www.weldbend.com