Articles in Category: Product Developments

Set against the backdrop of the recent presidential election, the media’s constant referral to protecting American jobs and employment should come as no surprise, even though the level of national employment has never been better.

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The reality, of course, is that national figures mask regional disparities and the disproportionate impact in some industries of offshoring and global competition has been intense. In practice, though, globalization is only part of the issue when it comes to the loss of jobs in certain industries. There has been a great deal of recent research which supports the position that automation is having as much, if not more, impact on certain industries than competition from abroad.

Automation Continues

As the Financial Times observed recently, automation has been a constant for decades, and the latest advances in robotics and artificial intelligence all but guarantee that the pace will accelerate, but some industries or job roles are particularly vulnerable to replacement by machines. All industries operate in a global environment, the decision as to whether to invest in automated processes should not and cannot be made based on employment, alone, if firms want to survive in the long-term.

The key question is not whether automation, robotics or artificial intelligence will replace humans in existing roles, the question is simply when. For society at large, the pace of automation will determine how easily the displacement of workers can be handled — and whether this creates a political backlash or is accommodated through retraining and the creation of new jobs.

Source: Direct Industry

We are used to seeing rows of gleaming robots assembling cars in modern automotive factories but a recent article in Direct Industry explores developments in the agricultural industry and highlights the fast pace of robotic developments that could well see the replacement of humans for many agricultural activities in the years ahead. Read more

The Asia Pacific region, especially countries such as China and India, has been driving the aluminum-free food pouches market.

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A new report said an increasing number of middle class customers with greater spend power, were being attracted toward cost-effective aluminum-free pouches. The high numbers could also be attributed to the large populations of China and India. The APAC region was followed by the European and the North American markets, respectively.

Why Pouches?

The report by Transparency Market Research (TMR) said consumers like the pouches because they are lightweight and easy to handle, in addition to being environmentally friendly, not to mention their low cost compared to the more common aluminum pouches. They also offer flexibility and ensure better shelf visibility.

Can aluminum-free pouches replace not only glass and aluminum, but also more common aluminum pouches? Source: AdobeStock/iaremenko.

TMP said many changes were occurring in the food packaging system from the way food is produced to how it was distributed, stored, processed and retailed. Food pouches, used for everyday food products, combine the advantages of traditional, rigid food packaging with modern flexible material.

The aluminum-free food pouch, also known as the alu-free pouch, was designed to have a number of advantages over aluminum including superior barrier property, near-perfect air-tightness, optimal puncture resistance to preserve the organic qualities of the food and diverse options for easy opening.

Aluminum-free pouches are required to be recyclable and easily disposable. Therefore, many companies in the APAC region switched to using them. In Europe and the U.S., a patented Ensobarr barrier coating has replaced the aluminum lamination in packaging boards.

Aluminum vs. Aluminum-Free

Based on consumer feedback, manufacturers in all regions are shifting from rigid packaging options that involve the use of glass and aluminum to more flexible packaging options. One option was the stand-up pouch, currently sees its demand going up due to innovations in their packaging styles using resealable spouts and cap. Near-zero leakage of liquids was another reason behind the high demand.

The report said the aluminum free food pouch market could be segmented on the basis of material type, pouch type, by its application and by region. On the basis of material type, the market was divided into flexible plastic which includes films and sheet, rigid plastic and others. The market can be further segmented into flat pouches, stand up pouches and others, while on the basis of application, it can be classified as vacuum, resealable, retort, spouted and stick market.

Many fresh food packaging companies are also shifting to the aluminum-free food pouch as it offers customization and the scope to create new packaging designs that companies require, rather than a one-size-fits-all can or jar.

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Product innovation and expansion are the key strategies adopted by major players in the aluminum-free food pouch market. Some of the key players in this market are Astrapak Limited, Berry Plastic Corporation, Coveris, Mondi Group, and Sonoco. These companies switched to aluminum-free food pouches as they gained expertise and experience in delivering them over the years.

An Indonesian Finance Ministry official said the government may not be done tinkering with export tax rules involving raw ore just yet. The island nation’s Energy and Mineral Resources Ministry partially lifted a ban on raw ore exports late last week.

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“We want the export duties to push domestic processing. That’s the principle,” Suahasil Nazara, head of the Fiscal Policy Office at the Finance Ministry, told reporters, adding that the taxes were “not just for increasing state revenues. There’s a high possibility we will continue with a scheme that has layers, depending on completion of smelters.”

Outokumpu Adds to North American Stainless Rebar Line

Outokumpu recently unveiled a new stainless rebar offering for the North American market at the World of Concrete trade show in Las Vegas.

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Following an expansion of its stainless rebar capabilities at its facilities in Richburg, S.C., Outokumpu will now sell stainless rebar in coil, cut-to-length or in bent shapes. The Richburg facility has capabilities to cover a full range of rebar dimensions between sizes #3 and #8 (from .375 inches to 1 inch) and lengths up to 60 feet, and will offer short lead times for customers in North America.

A 2014 Bureau of Labor Statistics report showed that companies in the top quartile of inventory turnover tend to have no more than three to four days of raw materials on hand. For metals suppliers this could lead to shortages and disrupt customers’ supply chains.

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Supply chain financing, though, can help buyers and sellers work to manage supply and cost issues. The role of supply chain finance is to optimize both the availability and cost of capital within a given supply chain by aggregating, packaging, and utilizing information generated during supply chain activities and matching this information with the physical control of goods.

If you’re buying metals for product manufacturing, for example, it can be beneficial to have the cash-flow flexibility of supply chain financing, especially if you’re a smaller manufacturer. In supply chain finance, an agreement is made between the buyer and supplier to use credit facilities or other financial instruments to bring down costs and risks for both parties.

Buyers can utilize “buy now, pay later” open account transactions which can be counted as regular payments for a continuing flow of goods rather than specific transactions or set prices and quantities. Buyers can extend payment terms with their suppliers. Suppliers, such as metals service centers, can use their credit ratings to bring in customers who, without support from banks, might otherwise not be able to do business with them. Other third-party financiers can also join in the agreements and assist either side with loans or other financing instruments.

In aerospace and defense, this could mean optimizing purchasing across a global supply chain. SCF provider Taulia recently announced a partnership with Exostar, which provides cloud-based solutions to the sector, as well as to the life sciences and health care sectors. There are more than 100,000 aerospace and defense corporate buyers using Exostar’s solutions that now have access to Taulia’s supply chain finance offerings. Taulia’s SaaS product is being integrated directly into the Exostar interface so if you’re a small manufacturer providing electronics or metal parts, you could have the same buying advantages of a larger organization.

Earlier last year, TradeRocket and Hitachi Capital America entered a similar agreement. TradeRocket provided Hitachi Capital with a pool of mid-market buyers (companies with annual revenues of $25 million to $500 million) who, once underwritten, would be able to use TradeRocket’s early pay invoice option to its entire supplier network.

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Giving buyers payment flexibility and suppliers access to new markets is a win-win for both bottom lines.

Following Russia’s military success in their support the Syrian regime, you could be excused for thinking Western sanctions, applied in 2014 in response to Russia’s annexation of Crimea, have had little or no effect on the country.

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Certainly, they seem to have had little impact in altering or encouraging a change in behavior but there are examples in which the sanctions have had quite a profound effect on the economy and particularly on certain industries.

A recent article in the Financial Times explores the challenges Gazprom Neft is facing in trying to exploit Russia’s vast shale gas reserves without the benefit of Western partners. Following the imposition of sanctions Western oil and gas companies withdrew support from any projects to exploit shale reserves requiring fracking technology, and as a result firms like Gazprom Neft, the oil division of state-controlled Gazprom, have been forced to go it alone in developing the technologies and practices necessary to exploit shale rock containing oil and gas resources.

Source: Financial Times

Progress has been slow, in spite of the huge potential. As Russia’s hydrocarbon resources dwindle from their peak in Soviet days, the country is sitting on vast shale resources rivaling the U.S. Read more

Yesterday, the U.S. Mint disclosed that the cost of production of a penny grew to 1.5 cents in 2016. Pennies are now nearly all zinc with a thin sheen of copper covering them so, if you read MetalMiner, it’s no real surprise that the Mint’s zinc costs went up. Or that nickels also cost more to make than they’re worth. Or, finally, that Treasury Secretary Jack Lew previously recommended that the federal government stop making penalties entirely.

Even toll plazas don’t want pennies anymore. Source: Adobe Stock/jojoo64.

In fiscal 2015 the cost was 1.43 cents; in 2014, it was 1.66 cents. The latest figures will be released in the Mint’s upcoming annual report. Maybe Lew has a point. Does anyone really want pennies anymore? Just look at how many of them sit around every day in convenience store give-a-penny, take-a-penny trays. Even tollbooths don’t want pennies anymore. Nickels are becoming as useless for purchases and as unwanted as their fellow more-costly-to-produce cousin, too. Read more

Price stories continue to dominate our look back at the most-read posts of 2016. Katie Benchina Olsen’s missive on why North American Stainless should hike prices was first published in late January. Stainless prices have taken off with the rest of the industrial metals since but this look back shows just how precarious the situation was for producers, who were afraid of scaring off customers with higher prices, back then. — Jeff Yoders, editor

North American Stainless (NAS), the US flat-rolled stainless market leader and the lowest cost producer, has a decision to make.

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Will NAS implement another base price increase effective in March or April? Last month, NAS, never known to be a follower, announced a base price increase which was half that of its competitors Allegheny Technologies, Inc. (ATI), AK Steel and Outokumpu Coil Americas. This meant that the only increase buyers would be paying was the less aggressive 2-discount point adjustment (approximately $0.04 per lb. increase on 304 base gauge).

Will NAS increase base prices in March or April? Source: Adobe Stock/Jovanning.

Will NAS increase base prices in March or April? Source: Adobe Stock/Jovanning.

Stainless base prices may have gone up since January 1, but buyers should still be paying a lower net price for standard 304 2B this month than they did in December. The increase on base gauge 304 was offset by the over $0.05 per lb. decline in the 304 alloy surcharge. 304 Base gauge net prices should decline in February since NAS’ February 304 alloy surcharge will be $0.3321 per lb., which is $0.0031 per lb. less than the January surcharge.

North American Stainless’ Market Position

NAS is in the best position to endure depressed stainless prices longer than any of its North American competitors, but now they are losing money, too. Acerinox, NAS’ parent company from Spain, posted a loss of over €8 million in Q3 2015, after being in the black the previous three quarters. Acerinox’s 2015 results will not be announced until February 29, but I would expect the results to be worse as alloy surcharges continued to decline through the end of 2015.

Price Hike?

I believe NAS will announce another base price increase once its March production is filled, which should be in the next week. The base prices in Q4 2015 were unsustainably low as a result of Outokumpu Coil Americas’ push to fill its Calvert mill with lower prices than NAS.

As long as mill lead times remain in check, service centers will support the domestic mills so that they can keep inventory as lean as possible while still being able to provide for the manufacturer’s requirements. My experience has been that when alloy surcharges are still declining, price increases are easier for the market to accept. Another base price increase is not only feasible for March or April, it is necessary to realign base prices to manageable levels for producer, service center and manufacturers. NAS needs to lead the next price increase and act like the market leader.

Japanese electronics company Panasonic and U.S. electric car maker Tesla said today they plan to begin production of solar cells at a factory in Buffalo, New York.

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The two companies said they finalized an agreement calling for Tokyo-based Panasonic to pay capital costs for the manufacturing. Palo Alto, California-based Tesla made a “long-term purchase commitment” to Panasonic.

Their statement gave no financial figures. The factory in Buffalo is under development by SolarCity Corp., a San Mateo, California-based solar panel company owned by Tesla. The photovoltaic cells and modules will be used in solar panels for non-solar roof products and solar glass tile roofs that Tesla plans to begin making, the announcement said.

LME Names New Clearing Executive

The London Metal Exchange has appointed James Proudlock as deputy chief executive of its clearing system, the exchange said last week.

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Proudlock, who has 30 years experience in commodities, will join LME Clear in April next year.”Prior to joining LME Clear, James worked at JP Morgan Securities for 10 years where he was a managing director and commodity product lead for Futures and Options and most recently markets execution,” the LME said.

“Trump puts pressure on Lockheed Martin over cost of F-35” says the Financial Times.

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Well, we don’t have a problem with that. These defense contracts are notorious for overrunning budgets and, although to be fair to the contractors, the overruns are as often due to the buyer changing specifications as they are to the manufacturer mismanaging the project. At least that’s the case here in the U.K., and I don’t doubt it’s the same in the U.S.

Poor Lockheed Martin. The president-elect doesn’t love its F-35 Lightning II. I guess no one appreciates air superiority anymore. Even five generations in. Source: Adobe Stock/Spacekris.

But — and this is the big but — whoever is to blame, the fact is it is you and me, the taxpayer, that picks up the tab for these overruns and we aren’t talking a few dollars. It’s billions. Billions that could be spent on other defense equipment or roads, schools, research and development, etc. So, if the new president-to-be is intent on reducing this waste, then good for him. The issue is how you achieve that. Read more

As we continue to republish our highest-rated posts of the year during the holidays, we look back at the February announcement that Allegheny Technologies, Inc., exited the commodity stainless steel business.

Knowing what we now know, and considering that stainless prices have recovered and entered a bull market, you do have to wonder if ATI made the right call. Our Katie Benchina Olsen will continue to cover the latest developments for both ATI and the stainless market in the new year. — Jeff Yoders, editor

For the foreseeable future, Allegheny Technologies, Inc. (ATI) is out of the flat-rolled stainless commodity business as well as the grain-oriented electrical steel (GOES) market.

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ATI will be focusing on global markets with high barriers to entry. As we reported last month, ATI is reducing its exposure in commodity products by idling its Midland, Pa., plant, a commodity stainless facility, and its Bagdad GOES production facility in Gilpin Township, Pa.

ATI's Brackenridge facility is the future and commodity stainless is its past. Source: ATI

ATI’s Brackenridge facility is the future and commodity stainless is its past. Source: ATI

Earlier this week, ATI reported in its earnings call a net loss of $378 million for 2015 as compared to a net loss of $2.6 million in 2014. ATI’s flat-rolled products business segment is to blame for the staggering losses. Operating losses for flat-rolled products were $242 million for 2015. For this reason, Rich Harshman — ATI’s chairman, president, and CEO — stated that ATI is taking “rightsizing actions” to return the segment to profitability as quickly as possible and “execute our strategy for sustainable long-term profitable growth.”

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