Geographic Coverage: US – Commercial Distributors and Contractors

LANCASTER, PA – Armstrong Ceiling Solutions today announced the following actions:

• Effective April 16, 2018, an 11% increase on the list price for all suspension systems
• Effective April 16, 2018, a 7% increase on the list price for all Axiom products
• Effective immediately, a 7% increase to all currently effective price exceptions for suspension systems
• Effective immediately, a managed inventory program designed to ensure continued service levels throughout all regions, with program details and procedures to be provided through authorized sales representatives.

“Over the last several months, our industry has seen significant increases in the cost of steel and aluminum raw materials,” said Charlie M. Chiappone, Senior Vice President – Ceilings Solutions. “While Armstrong and Worthington Armstrong Venture remain diligently focused on effectively managing through this challenging inflationary environment, these measures are necessary at this time. We will continue to focus on delivering innovative, high-quality products and world-class service to our valued customers, and the ceiling and wall solutions they value. We appreciate your business as we navigate these volatile market conditions.”

Thank you.

The price increases and programming changes identified in this Sales Bulletin apply to the suspension system and Axiom products sold by the Worthington Armstrong Venture.

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The current US galvanized flat rolled steel market, which is most important to construction markets, is approximately 16-18 million tons. Prior to 2014, galvanized imports averaged approximately 10-12% of the US HDG market. From 2014-2017, the imported market share jumped to average of 21-23%. Construction accounts for 45% of the US consumption of HDG. Current domestic capacity utilization for HDG production is estimated be over 90%.

Since the announcements that the current administration was considering tariffs on imported steel in the summer of 2017, Hot Rolled Futures on the CME have moved from $560/ton in June, 2017 to $895/ ton for April,

Post Tariff Questions and Issues:

Canada (16%) and Mexico (9%) are key steel suppliers to the US market and have been indefinitely excluded pending NAFTA negotiations

The West Coast sheet steel mills are almost exclusively dependent on imported steel slabs- will these slabs be excluded?

Galvanized flat rolled imports are predominately lighter gauge material (.012-.023 gauges) which impacts ceiling grid, cornerbead, metal lath and drywall metal studs/ track- given domestic HDG capacity utilization would this cause a shortage in these product lines?

Currently, the domestic steel mills are allocating tonnage to the lower end of their contracts for most customers with contracts. The spot market for steel remains volatile.

Source: Clark Dietrich Building Systems

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