Articles in Category: Metal Fabricated Parts

The Bureau of Labor Statistics recently released its producer price index (PPI) for May. An analysis by the Associated General Contractors of America showed that steel mill product prices were down 2% for the month and 11% over the previous year.

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AGC Chief Economist Ken Simonson wrote that goods such as steel and concrete constitute 60% of the index (including 7% for energy); services, 40% (trade services, 25%; transportation and warehousing services, 4%; other services, 10%). The overall PPI for inputs to construction increased 0.6% from April to May. The index for energy soared 12% for the month, outweighing declines of 0.2% in the index for goods less food and energy and 0.1% in the services PPI.

The PPI for all goods used in construction declined 3% over the last 12 months. Materials important to construction that had notable one- or 12-month price changes include diesel, up 11% for the month but still down 36% over 12 months. The aforementioned steel mill products fell -2% and -11%, respectively. Steel pipe and tube were down -1.9% for the month and -9.2% for the year. Copper and brass mill shape prices were up 3.7% in May but still -3.7% for the year. Fabricated structural metal bar joists and rebar prices were up .3% and 1.3% for the last 12 months.

What this Means for Metal Buyers

Energy prices are still rising, changing the cost calculations for construction projects, yet construction materials prices remain low, allowing estimators to reduce costs.

Ernst & Young has quantified the effect of lower oil prices on exploration and non-residential construction starts soared in May.

Free Download: Latest Metal Price Trends in the June MMI Report

Deepwater oil projects and complex gas facilities worth around $200 billion have been canceled or put on hold worldwide in recent months due to the sharp drop in oil prices over the past year, consultancy Ernst & Young said on Tuesday.

Further project cuts and delays are likely as the industry braces for an extended period of lower oil prices as a result of a supply glut. This has affected the previously strong sales of metal products such as oil country tubular goods (OCTG).

Non-Residential Construction Up

Non-residential construction starts soared by 30.3% in May after taking a 5.6% hit a month earlier, according to data provider CMD.

Non-residential construction starts were 2% higher for the first five months of 2015 than they were during those months last year. The value of non-residential construction starts from January to May was $119.5 billion, the report said. Standout projects that started in May include Tesla Motors’ $2 billion battery gigafactory in Nevada and $1.1 billion Microsoft data center in Iowa.

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Today in Metalcrawler, a major construction project in Washington will eventually require 33,000 tons of steel and a powerful lawmaker wants to tie the Highway Trust Fund to a trade bill.

Boeing 777X Plant Requires Giant Steel Trusses

About 33,000 tons of steel are needed to build the $1 billion Boeing 777X wing plant in Washington state. The building is 1,200 feet long and has two open spans of 420 feet wide and 460 feet wide.

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To support those spans, 45-foot-deep steel girders are being used. At any moment 50 trucks are on the road bringing steel to the site from Oklahoma, Arkansas and Colorado.

The $1 billion, 1.3-million-square-foot building will be where Boeing fabricates carbon composite spars and skins for the 777X wings.

Pelosi Wants to Link Trade, Highway Bills

House Minority Leader Nancy Pelosi (D-Calif.) said Democrats would be more likely to support the controversial trade bill that was defeated on Friday if Republicans would support a long-term transportation funding package, the Hill reported.

Pelosi helped sink President Obama’s trade package in a Friday vote by announcing her opposition, but she also signaled she wants Republicans to consider a deal involving highway funding in a letter to her conference. The Highway Trust Fund was extended through the end of July recently but both parties have said they desire a long-term deal that will fund federal highway maintenance through at least the next five years.

Congress has been grappling with a shortfall in transportation spending that is estimated to be about $16 billion per year, and they have not passed an infrastructure package that lasts longer than two years since 2005.

Free Download: Latest Metal Price Trends in the June MMI Report

MM-IndX_TRENDS_Chart_June-2015_FNLRemember that bounce we saw in most of the metal prices we track last month? Annnnd it’s gone.

The bearish environment our metals are up against resumed this month as the strong dollar erased nearly all of the gains from May. There were some positive outliers, though, with construction showing growth just as the summer building season begins in the US and the Global Precious Metals MMI was able to hold onto its May gains.

Check out the June MMI Report to get details on the fundamentals of all of the markets we track.


Engineers have produced a new nickel, copper and titanium “memory” alloy that that springs back into shape even after it is bent more than 10 million times.

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The journal Science reported that the new shape memory alloy shatters previous records for bending and is so resilient it could be useful in artificial heart valves, aircraft components or a new generation of solid-state refrigerators.


Shape memory alloy photo courtesy of Rodrigo De Miranda/University of Kiel.

shape memory alloys (SMAs) are already used in surgical operations and other applications. A stent, for example, might be squashed into a small space and then spring into its designed shape to prop open a blood vessel.

When SMAs are bent or otherwise structurally deformed, the stress (in the form of heat or electrical current) causes the SMA to spring back to its original design.

Yet, as a technology, the alloys have never entirely fulfilled their promise and entered the world of “high-cycle fatigue” applications.

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The US construction industry added 17,000 jobs in May according to the June 5 preliminary estimate released by the Bureau of Labor Statistics.

An Associated Builders and Contractors analysis of the numbers put the national construction unemployment rate at 6.7%,  the second-lowest industry unemployment rate since November 2007.

April’s estimate was revised downward from 45,000 to 35,000 net new jobs. Non-residential construction employment increased by 8,200 jobs in May, with nonresidential specialty trade contractors adding 5,600 jobs and non-residential building employment expanding by 2,600 jobs. Residential construction employment added 8,500 net new jobs for the month.


Wyoming, South Dakota, Nebraska, North Dakota, and Utah were the five states with the lowest construction unemployment rate, four of which also reported the lowest unemployment rates in April. The construction unemployment rate in Wyoming for April was 1.3%, followed by South Dakota (1.9%), Nebraska (2.3%), North Dakota (3%), and Utah (3.2%).

Estimators purchase more construction materials when there are more projects. I think we’ll see strong construction spending throughout the summer, which might even give a price boost to beleaguered markets such as steel if the economies of scale are big enough.

Construction employment for the month and the past year breaks down as follows:

  • Nonresidential building construction employment is up by 19,500 jobs or 2.8% since May 2014.
  •  Residential building construction employment expanded by 1,800 jobs in May and is up by 44,100 jobs or 6.8% on an annual basis.
  • Nonresidential specialty trade contractors added 5,600 jobs for the month and employment in that category is up by 80,600 jobs or 3.7% from the same time one year ago.
  • Residential specialty trade contractors added 6,700 net new jobs in May and have collectively added 104,900 jobs or 6.3% since May 2014.
  • The heavy and civil engineering construction segment added 400 jobs in May, and employment is up by 24,200 positions or 2.6% on a year-over-year basis.


San Francisco is known for its groundbreaking architecture. The City By the Bay is home to such classic marvels of architecture and engineering as the Transamerica Tower and the Golden Gate Bridge.

Uber Headquarters_Corner Exterior_SHoP Architects PC_550

Renderings for the new Uber HQ in San Fransisco bring back glass walls, exposed steel frames and, our favorite, structural steel bracings. Thanks, SHoP Architects and Studio O+A! Rendering courtesy of SHoP Architects.

The Embarcadero Center is even known as the modernist response to the art deco statement of New York City’s Rockefeller Center. Yet, due to seismic codes and other factors when these buildings were designed, most of San Francisco’s great architecture is of the concrete variety.

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Even the Embarcadero Center is coated in waves of concrete. While it’s certainly modernist, it’s not steel and glass with a beautifully exposed steel frame in the mold of the father of modernism, Ludwig Mies Van der Rohe.

Uber Headquarters_Pierpoint Lane_SHoP Architects PC_500

Uber’s two mostly steel, glass and wood buildings will be connected by pedways and a common space on Pierpont between the two buildings.  Rendering: SHoP Architects.

Thanks to Uber, though, that’s all going to change with a new complex planned for San Francisco’s up-and-coming Mission Bay neighborhood. Uber is, in short, building a glass house. And they promise not to throw stones. Read more

The only US rare earths miner may miss a payment deadline today, President Obama signed an extension of funding for the Highway Trust Fund for just two more months and US economic growth actually contracted in the first quarter.

Molycorp Loan Payment Due Today

Rare earths miner Molycorp is expected to announce it will skip a $32.5 million loan payment today, triggering a 30-day grace period that could lead to a bankruptcy filing before the end of June, the Wall Street Journal reported, attributing the information to people familiar with the matter.

Free Download: Latest Metal Price Trends in the May MMI Report

In 2010, after Molycorp — formerly a unit of Chevron Corp. — was sold to private-equity firms in 2008 for $80 million— the company was able to raise $394 million in a public offering. Around that time, China tightened existing quotas on rare-earths exports in a bid to rein in overproduction and keep more supply available for domestic manufacturer and prices soared.

Since 2011, however, rare-earths prices have been on a long slide downward. Now with a market capitalization of around $150 million, Molycorp is indebted and unprofitable. Customers are putting in orders, but the company hasn’t met production targets at its Mountain Pass, Calif., mine and is in restructuring talks with firms representing its creditors.

Obama Signs Highway Funding Extension

President Obama on Friday signed a two-month extension of highway funding into law, the White House announced in an evening statement.

The measure, dubbed the Highway and Transportation Funding Act of 2015, extends several aspects of infrastructure funding through the end of July.  That includes highway aid and transit programs under the Highway Trust Fund, as well as freeing up monies in the fund and allowing tax revenues to be deposited in the fund.

White House press secretary Josh Earnest criticized the short-term funding measure earlier as lawmakers punting on the issue, encouraging Congress to pass a longer-term deal.  The stopgap measure represents the 33rd temporary fix for road project funding since 2008, Earnest noted, leading to some uncertainty among states for major highway plans.

US GDP Contracted in Q1

US economic growth in the first three months of the year was even weaker than initially estimated. The Commerce Department said Friday overall economy, as measured by the gross domestic product, shrank at an annual rate of 0.7% in the January-March period. That’s down from 2.2% in the fourth quarter of 2014.

GDP is the broadest measure of US economic strength, seeking to measure the total value of all goods and services produced in a calendar year.

This week our metals faced off against a resurgent US dollar and, once again, lost ground.

Free Download: Latest Metal Price Trends in the May MMI Report

It’s enough to make a metals trader or buyer need a stiff cocktail. How about a nice Moscow Mule in a copper mug? Two ounces of vodka, four ounces of ginger beer and one ounce of lime juice just isn’t the same in glassware. How can your fizzy ginger beer be served in plain, old glassware? Well, badly.

Moscow Mule in a Copper Mug. This is a Vodka drink served with mint, and a garnished with a wedge of lime, The image is a cut out, isolated on a white background, and includes a clipping path.

Moscow Mule in a copper mug, the best medicine for low copper prices.

When vodka comes into contact with the walls of a copper mug, oxidation begins which boosts the aroma, and in turn s taste of vodka. Cold copper may increase the amount of bubbles in the ginger beer, offering maximum fizz to the cocktail. Even the taste of the lime juice is enhanced by cold copper, and it reduces the acidity of the drink to complement the ginger beer.

Served Better in Metal

The original Moscow Mules demanded strict eight-ounce copper mugs, even. Sadly, the mixology craze has not yet pushed enough copper mugs onto shelves to effect the Copper MMI. If prices stay low, perhaps more and more mules will be sold and more bars will invest in copperware causing a Friedmanian run on copper. Pass me another full mug, please.

Our Russian friend is not the only cocktail to be enhanced by delivery in a metallic vessel.

Silver and Mint Juleps

Mint Juleps are said to be better served in silver cups, again to enhance the taste of the mint and the bourbon, although this precious metal investment is a bit more pricy than the copper mugs of the pride of Moscow.


Mint Juleps getting an extra kick from silver cups.

With summer upon us, it’s a good time to break out the metal drinking vessels, anyway, and get the best outdoor experience from your oxidizing and cold, metal vessels. That and it’s barbecue season. Even foodsafe stainless steel has gotten into the act. Hard to believe that there was a time when beers weren’t packaged in aluminum cans, isn’t it?

Make sure to enjoy your metal-cupped cocktails safely this summer. No one wants their next drink to come from a tin cup.

New futures contracts for rebar and scrap cleared a hurdle recently and a major automaker said thanks, but no thanks, to aluminum bodies.

LME Closes in on Market Makers

The London Metal Exchange (LME) is close to sealing deals with market makers to guarantee liquidity for its new steel rebar and scrap futures, a move that industry experts say is a step in the right direction.

Why Manufacturers Need to Ditch Purchase Price Variance

But for real longevity, the contracts will need crucial support from major banks and participation of major steelmakers and institutional investors.

A senior level source with knowledge of the process told Reuters progress had been made in discussions with professional market makers as well as physical traders. The contracts are scheduled for launch in October.

“Having market makers would make a huge difference. In the current steel contracts there are no market makers,” Antonio Novi, a director at Levmet, a metals trader that also provides hedging services to industrial companies, told Reuters.

“If it’s true that there’s market makers, we’ll be using it, but until I see it I’ll doubt it very much.”

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