US industrial output has been falling on a month-on-month basis since August and the manufacturing PMI fell below 50 in late 2015. Even with the bounce in January PMI data to 52.7, the manufacturing outlook remains uncertain after an extended period of weakness and continued currency strength.
Yet, we suggest that US mills are (right now) in a sweet spot in terms of pricing. Are we crazy?
After a dismal 2015, steel mills are finally in a position to drive prices higher. It may not be for long, but any buyers that are short of flat steel in the short term will have to pay substantially higher prices in the next few months. We suggest that prices could rally $100-150 a ton between December 2015 and April/May 2016.
Supply Finally Constrained
Import and domestic supply is curtailed. US mills operated at 60-65% capacity in December.
With continued uncertainty regarding anti-dumping actions, finished steel imports are slowing. Importers cannot start selling again until final determinations are in, meaning that June arrivals are probably the earliest.
A new report released by the Solar Energy Industries Association and produced by GTM Research forecasts that US Solar installations will more than double next year, reaching 15.4 gigawatts of solar power installed in 2016.
Worldwide, growth in solar installations is expected to rival the boom occurring in the US. Berlin-based research firm Apricum forecasts that 54 GW will be installed worldwide in 2015, with new capacity additions reaching 92 GW by 2020. The largest market for the most common type of panels, solar silicon photovoltaics will be China, with 180 GW of total capacity installed by the end of 2020, followed by the US (83 GW) and Japan (57 GW).
Photovoltaic solar array at the National Renewal Energy Laboratory.
As 2015 ends this week, US installed capacity of photovoltaics stands at 7.4 GW, an improvement over 6.3 GW last year.
Part of the reason for the surge was purchases made by individuals and utilities to beat the scheduled expiration of the federal investment tax credit at the end of the year. That all changed when congress passed a long-term extension of the wind and solar tax credit as part of its omnibus spending deal earlier this month.
Established by the Energy Policy Act of 2005, the wind/solar investment tax credit provides a tax credit of 30% of the value of solar projects. Annual solar installations have grown by at a compound rate of 76% since the act was implemented in 2006. Under the new scheme, the 30% solar tax credit will extend through 2019 and then decline gradually to 10% in 2022. After 2022 the credit will be eliminated for residential solar installations and will continue at 10% for commercial ones. Bloomberg New Energy Finance predicts that the move by congress will add an extra 20 gigawatts of solar power over the next five years.
Solar silicon prices have remained stubbornly low and, while this extension won’t necessarily help them rise, it will spur utilities and homeowners to adopt them for electricity generation. The low prices, in this way, are a feature of expanded adoption and a not a bug as the generous discounts, on top of low prices, will make solar a cheaper alternative to other low-price power supply technologies such as natural gas.
The extension of the tax credit through 2019 is a boon to photovoltaic manufacturers and wind/solar energy suppliers who were quick to celebrate the long-term extension as an important step toward their goal of developing clean energy at an affordable cost through the development of solar projects.
“This is a game changer for our company and will finally allow us to plan with certainty our growth and expansion over the next several years,” said John Billingsley, Chairman and CEO at Dallas-based Tri Global Energy. “Tri Global Energy plans aggressive expansion of both our wind and solar divisions into diversified geographical areas across the US.”
Airbus and Autodesk‘s design studio, The Living, have designed and developed the largest 3D-printed metal part for a commercial airplane in history, what they call a “bionic” partition that is 3D-printed from a direct metal laser sintering (DMLS) “printer” that uses a new super-strong alloy called scalmalloy to achieve the lightness of aluminum with the strength of titanium.
Already used for small parts, often with complex shapes, the Airbus/Autodesk project brings additive manufacturing into the plane’s cabin. The assembly is for a partition that separates the passenger cabin of an A320 from the rear galley.
Autodesk CTO Jeff Kowalski unveils the new Airbus A320 “bionic” partition, made of 112 3D-printed parts. Photo: Jeff Yoders
The resulting “bionic” replacement is a stronger partition compared to the current model that also saves 55 pounds in weight. If one final test is passed next month, the new partition will be in every new A320 next year. The companies estimate that using it will remove 96,000 tons of CO2 a year thanks to less jet fuel being burned to transport the lighter partition system. Read more
There was major currency and anti-dumping news this morning.
IMF Adds Chinese Yuan to Reserve Currencies
China notched an economic milestone Monday, as the International Monetary Fund added the yuan, also known as the renminbi, to its elite basket of reserve currencies, a move designed to spur greater liberalization in the world’s second-largest economy.
The Wall Street Journal reported the decision—effective next October—confers international status on China’s currency as the government starts to ease restrictions on its rigidly controlled exchange-rate and financial system.
Steel Caucus Wants Action on Customs Enforcement
The American Iron and Steel Institute (AISI) applauded the efforts of the Congressional Steel Caucus, led by Chairman Tim Murphy (R-PA) and Vice Chairman Pete Visclosky (D-IN), to emphasize the importance to the steel industry of overdue legislation to address the evasion of trade remedy orders.
40 Members of the Steel Caucus recently sent a letter to the leaders of the House Ways and Means Committee, which has jurisdiction over trade issues, urging that the committee work with its Senate counterparts and make finalizing the Trade Facilitation and Trade Enforcement Act (H.R.644) a priority as Congress returns from the Thanksgiving holiday break.
The bill, also known as the Customs Reauthorization, should be the vehicle to pass the ENFORCE Act — which would ensure that current trade remedy laws are being fully enforced and that anti-dumping and countervailing duties are being accurately assessed and collected at the border, the Steel Caucus said. The House and Senate each passed different versions of the customs bill this summer; however, a conference to resolve differences in the legislation has been stalled.
Rep. Murphy said, “We achieved historic success in the House with trade remedy language earlier this year, but we can’t rest on our laurels. The House Steel Caucus is working to ensure strong enforcement standards remain in the final conference report.”
A full copy of the letter to the Ways and Means committee can be found here.
This is the first full year for the new LBMA gold and silver prices. More open and transparent processes for precious metal prices can only help purchasers in the long run by giving them more information about what goes into the prices they are quoted. We are thankful for market transparency in all its forms.
Happy Thanksgiving from everyone here at MetalMiner!
That’s why our own MetalMiner IndX is updated daily with over 600 price points from domestic and multiple international markets. We’re always happy to add more open and transparent price points. Read more
It is set to give an impetus to steel, aluminum and composite materials demand in the country. Recently, US aircraft manufacturer Boeing Co. and India’s Tata Advanced Systems Ltd. (TASL) announced a joint venture to manufacture aerostructures for aircraft beginning with the reputed AH-64 Apache fighter helicopter.
Make in India, in this case, means making Apache helicopters there thanks to a joint venture with Boeing. Source: Adobe Stock / VanderWolf Images
The joint venture, according to media reports, would also then compete for additional manufacturing work packages across Boeing platforms, both commercial and defense.
Burgeoning Private Defense Industry
Currently, as many as 14 Tata companies are providing support to India’s defense and aerospace sector. In addition to TASL. The list also includes Tata Advanced Materials, a company that has delivered composite panels for cabinets and auxiliary power unit door fairings for the P-8I long-range maritime surveillance and anti-submarine warfare aircraft.
Another company, TAL Manufacturing Solutions, has manufactured floor beams out of composite materials for the Boeing 787-9, and provided ground support equipment for the C-17 Globemaster III strategic airlifter. Read more
Source: US Energy Information Administration depiction of Federal Highway Administration data.
Earlier this year, the federal Highway Trust Fund (HTF) reached its lowest level in decades, ending July at $6.1 billion dollars. A congressionally approved transfer of more than $8 billion boosted the fund’s balance to end the fiscal year (September 30) at $12 billion, but that is still the second-lowest year-end level since 1984. As we speak, the House and Senate are working on a six-year funding extension for it. The fund pays for all federal highway projects and another (mass transit above) pays for all federal mass transit projects. Both are suffering as the gas tax that funds them has not been raised since 1993 and most cars are much more fuel efficient these days.
Shipments from US steel companies were down in September and the federal Highway Trust Fund reached its lowest level in several decades in July.
Steel Shipments Down in September
The American Iron and Steel Institute (AISI) reported that for the month of September, US steel mills shipped 7,120,663 net tons, a 4.7% decrease from the 7,470,120 net tons shipped in the previous month and a 15% decrease from the 8,372,929 net tons shipped in September 2014.
Shipments on the year-to-date in 2015 are 66,162,973 net tons, a 10.7% decrease vs. 2014 shipments of 74,123,773 net tons for the first nine months of last year.
A comparison of September shipments to the previous month of August shows the following changes: cold-rolled sheet, down 7%, hot-dipped galvanized sheets and strip were down 8% and hot-rolled sheets were down 10%.
A congressionally approved transfer of more than $8 billion boosted the fund’s balance to end the fiscal year (September 30) at $12 billion, but that is still the second-lowest year-end level since 1984.
Work on the bleachers finished in June, and general contractor Pepper Construction is continuing work on a new plaza building adjacent to the park. Work on this new construction building will continue into phase two, and it will provide a spacious underground clubhouse for the players as well as office space and other amenities.
Concrete work is completed for the foundations and the first level basement of the new building. Steel is going up as excavation continues. The steel is completed up to the 6th floor now. Sheathing and building envelope work on the new building will continue through next season.
Structural steel that makes up the skeleton of the new Wrigley Field support building is being installed while simultaneous work goes on underground beneath it. Image: Jeff Yoders
“This has been so exciting for us,” said Kevin Heatter, project executive for Pepper. “Fans will see some really cool construction while seeing a baseball game. You won’t get that anywhere else. I tell the young kids in the trailer that what you will experience on this job, you will only see every 10 or 15 years if you’re lucky.
“You will likely never see a project exactly like this again because of the historic nature of Wrigley Field. It’s a unique project in a unique location that requires some of the best minds in our industry to come together to develop creative ways to build it. That’s what makes it a lot of fun. It’s a challenge, sure, but boy it’s what gets you excited in the morning when you come in.”
This is part three of a series on how 3D design and construction procurement was used in the restoration of Wrigley Field. See parts one and two if you missed them.
Wrigley Field’s bleacher restoration schedule was aggressive and precise, since the MLB off-season is among the shortest in pro sports. It’s also the coldest, as the term “boys of summer” means the only time to work on your stadium is during winter. The Chicago winter. Known for its wind and snow.
The Chicago winter did not cooperate with the off-season schedule. Much colder than the relatively light winter in 2013, the weather complicated the ballpark restoration and concurrent city of Chicago work to modernize underground utilities serving the stadium and the neighborhood.
Structural steel placement for the new Wrigley Field jumbotron had to take place during the cold winter months. Image: Pepper Construction
The bleacher phase of the project was completely exposed to the elements and that made for a grueling and challenging January, February and March. Safety is the number one priority for general contractor Pepper Construction and many days the temperatures were simply too cold for the team to safely work.