Product Developments

The job of 3D-printing the world’s first office building is being tackled and 27 states have filed a lawsuit against the EPA over new clean water rules.

3D-Printed Office Building

Plans have been made to 3D-print a 2,000-square-foot office building – along with the furniture for its clients. Shanghai design company Winsun Global will work with architecture firm Gensler, structural engineer Thornton Tomasetti and construction manager Syska Hennessy Group on the project and plans to use reinforced concrete, fiber-reinforced plastic and glass-fiber-reinforced gypsum in a 20-foot-tall 3D printer. The project should require up to 80% less labor and could reduce construction waste by as much as 60%.

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Winsun previously 3D-printed a house and an apartment building using similar materials and methods.

27 States Suing EPA

Several lawsuits have been filed by 27 states against the Environmental Protection Agency‘s expanded water rules. The states are concerned that the EPA violated the Clean Water Act and other laws when it extended its authority. The separate suits are expected to be combined into one case in federal court.

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Home sales surged in May and major producer Australia cut its iron ore forecast further.

US Home Sales Hit 9-Year High

Contracts to buy existing homes in the US rose in May to their highest level in over nine years, boosting the housing market and the broader economic outlook.

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The National Association of Realtors said on Monday that its pending home sales index, based on contracts signed last month, increased 0.9% to 112.6, the highest level since April 2006. Contracts have now increased for five straight months.

Australia Cuts Iron Ore Price Forecast

Australia, on Tuesday, cut its price forecast for iron ore in 2015 by 10% to $54.40 a metric ton, citing a weak outlook for the commodity’s main market, China’s steel sector. The forecast by the Department of Industry and Science is a sharp decrease from the $60.40 per mt predicted three months ago and is way off the $94 a mt touted in January.

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A couple of weeks ago we identified a new metal war ready to be waged against hospital-acquired infections, aka healthcare-associated infections (HAIs). And not surprisingly, only a few types of infections make up the majority of the problem, with the cost pegged at anywhere from $28 billion to $88 billion annually.

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So we wanted to know where the bacteria that cause some of these infections actually live and how hospitals have sought to lower infection rates.

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What can antimicrobial copper door handles and bedrails mean for hospital infections? A lot.

Quite simply, we see metals – specifically antimicrobial copper – as a big part of the solution (we will come to that in a moment).
In our prior piece we indicated the 4 most dominant categories of healthcare-associated infection: urinary tract infections, surgical site infections, bloodstream infections and pneumonia. The causes for many of these HAIs involve contamination of the healthcare setting, surgical procedures, medical devices, needles and tubes used for blood work, catheters, endotracheal procedures, contagious diseases between and among health care workers and patients, and more.

“Between” and “Among” are the Operative Words

So, where do these germs spread “between and among?”

Recently, the Wall Street Journal reported on the Hospital Microbiome Project, which collected microbe samples in a hospital setting to see how the design, room setup and items in a room exacerbate the spread of HAIs. Not surprisingly, bacteria and microbes live on places such as windows, counters, AC vents, cell phones, doorways, beds, curtains, tray tables, chairs and shower heads.

In short, microbes live on many surfaces containing metals or could contain metals such as bed rails, tray tables, counters, doorways, handles, fixtures, etc., and many of the above-referenced items.

MetalMiner followed up with Jack Gilbert of the US Department of Energy’s Argonne National Laboratory, who ran the Hospital Microbiome Project, and though the results of this study will not be released until 2016, Gilbert indicated that he supported the use of antimicrobials in hospital environments.

Furthermore, the World Health Organization (WHO) outlines a number of procedures and strategies designed to reduce infections from the environment as it pertains to hospital equipment and “all horizontal surfaces.” As one would expect, the horizontal surfaces look a lot like where the Hospital Microbiome Project saw all of the microbes.

Copper: Antimicrobial Alloys, Deploy!

And that’s where copper fits in. In 2008, five different groups of copper alloys received an EPA registration. The registration enables the registrant to “market these products with a claim that copper, when used in accordance with the label, ‘kills 99.9% of bacteria within two hours.’”

The alloys themselves contain a minimum of 60% copper and are currently marketed under CuVerro (by Olin Brass), the market leader. And herein lies the catalyst for Copper Wars – these new materials will need to compete with incumbent installed surfaces including stainless steel, plastic and other materials.

In a follow-up post we’ll examine the cost impact of regulatory penalties placed on poorly performing hospitals with unsatisfactory performance around HAIs. [Hint: it’s significant].
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The oil price may be up, but oil companies are desperately shelving projects, slashing capital expenditures and laying off workers, and not just in US shale deposits.

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One area where oil production is set to rise for years to come is, ironically, one of the highest cost: the Canadian tar sands oil. Oil sands companies that have already sunk money into mines and steam injection wells in Alberta have no incentive to stop operating or building out projects that are already well underway.

Tar Sands Investments

Such capital intensive projects are on the opposite end of the price sensitivity scale from shale, where dozens of rigs have been idled over recent months. Oil sands are operated more like a factory, fleet of trucks or a pipeline, run at maximum capacity to reduce the unit cost as much as possible and service startup debt according to the FT.

The paper reports the Canadian Association of Petroleum Producers last week forecast that western Canada’s output will keep increasing by about 156,000 barrels per day each year until 2020. Growth continues after that but slows to 85,000 b/d a year until 2030. Capital spending by Canada’s oil and natural gas industry will total Canadian $45 billion (US $37 billion) in 2015, 40% lower than 2014 and solely focused on building out existing projects that are too expensive to abandon.

New on the drawing board projects, on the other hand, have stayed there. New projects are projected to need an average Brent crude price of more than $100 per barrel to break even and no one, absolutely no one, is taking a bet on that anytime soon.

Compare that to an average break-even price of $29 per barrel for reserves onshore in the Middle East, $57 per barrel in ultra-deep water and $62 per barrel in North American shale, according to Rystad Energy quoted in a Reuters Commodity Note.

Climate Change Legislation Looms

The industry faces more challenges than just the price of oil. This year the leftist New Democratic Party was elected to govern the province of Alberta after pledging to raise corporate taxes and review oil royalties. Maybe even more of a threat is legislation as a result of fears of climate change.

The Oil-Climate Index shows that medium, sweet synthetic crude from Canada’s Athabasca oil sands generates 767 kilograms of CO2 per barrel, compared with 559 kg for Brent crude from the North Sea – itself hardly a low-carbon product due to the challenging deep water nature of UK’s North Sea oil fields.

The industry is trying to reduce costs and to reduce the carbon footprint of oil sands extraction technology, and if the innovative and entrepreneurial drive shown by US shale firms is any indication, it will undoubtedly make strides in both of those objectives. Even so, climate change legislation could be the killer just as oil prices begin to recover. A study by University College London found that 85% of Canada’s bitumen reserves should remain un-burnt if the world is to avoid the 2 degrees Celsius average temperature rise seen by many politicians as the tipping point number.

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PriceWaterhouseCoopers‘ Mine 2015 Report was good news for India, but cast a troubling picture of the overall global mining industry.

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Dry-fuel miner Coal India Ltd. (CIL) moved up from the 8th to the 6th slot on the list of the largest mining companies in the world in terms of market capital.

A second state-owned company, which was also the country’s top iron ore miner, National Mineral Development Corporation (NMDC), also improved its ranking by coming in 21st, up three spots over the previous year.

What is Mine 2015?

Mine 2015 analyzed the financial performance of the world’s top 40 mining companies by market capitalization. The report said market values continue to fall, overall, in spite of improvements reported in the financial results of all top 40 companies.

Depending on which way you read it, in 2014, a collective $156 billion was eroded (about 16%) of the top 40 companies’ combined market value, but then again, that was only half of the 2013 slide. The collective market capitalization came in at $791 billion in 2014, which was the range miners held a decade ago.

The report said the world’s largest miners had reduced spending but stepped up production. The industry was also helped by lower input costs and currency devaluation. PwC did note, however, that weak commodity prices due to low demand hammered down revenues.

The Iron Ore Drag

The report said the downturn was largely driven by iron ore miners, particularly diversified companies with large exposure to shifts in commodity prices.

Last year, iron ore was the hardest hit, with prices dropping by half because of a supply glut and a negative short-term demand outlook, the report said.

On the coal front, coal miners in the BRICS countries (Brazil, Russia, India, China, South Africa) saw their values increase 19% over the period, regaining almost half of the value they lost in 2013.

In Asia, more industry consolidation was expected between key resource players from India and China in order to stem production overcapacity, the report said.

Chinese Production Still Surging

The coal companies of China made significant gains in the ranking of the top 40 mining companies, with three appearing in the this year’s top twenty.

China Shenhua Energy Co. Ltd (Shenhua) topped the list, becoming the third most valuable mining company (based on market capitalization) after BHP Billiton and Rio Tinto Group. Shenhua moved up from fifth in 2013’s rankings.

Another company, China Coal Energy Co. climbed to 14th rank from 23rd in 2013, with a 30% increase in valuation, while Inner Mongolia Yitai Coal Co. jumped to 18th from 25th. Yanzhou Coal Mining Co. came in at 26th – up from 34th in 2013. Yanzhou also recorded a more than 30% increase in value over 2014.

US Miners Can’t Keep Pace

On the other hand, not many US coal-mining companies charted in Mine 2015. Consol Energy found itself at number 28. No other companies charted despite noted concern from US manufacturing execs about local resource supply.

Of the 40 companies, 15 miners saw their share values appreciate, while 25 witnessed a decline.

The average return on capital employed was largely below the minimum hurdle investment rate of 15 to 20% set by the companies themselves. Only 6 of the 40 passed the 15% benchmark: CIL (coal), OAO Norilsk Nickel (nickel), NMDC (iron ore), Randgold (gold), Shandong Gold (gold), and Newcrest (gold), according to the report.

Copper Still Stagnating

On the copper front, Mine 2015 noted that global copper production had gone up by only 2.8% last year, which was way below the 8.1% of 2013. PwC noted that the world’s largest copper producer, Chile, had faced problems increasing its production due to falling grades.

PwC’s general outlook for the global metals and mining market though remains dreary due to the continuance of a slower rate of economic growth, particularly in emerging markets, especially due to the cooling off of China’s growth rate.

In 2014, iron ore, coal and copper prices had fallen by 50%, 26% and 11%, respectively, according to the report.

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Usually, Iron ore and coking coal move in lock step. The two raw materials for steel production are driven by the same demand factor, – at least for seaborne trade consumption – by the Chinese, Japanese and Korean steel industries.

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Often production comes from the same or similar multinational suppliers – Rio Tinto Group, BHP Billiton, Glencore PLC.

China’s domestic producers, like its iron ore mines and steel producers are state owned. Both raw materials have experienced massive investment surges this decade as high prices encouraged producers to boost production and both have suffered aggressive price falls as supply has hit a weakening demand market.

The Iron Ore Mini-Rally

Recently, though, prices have diverged. Iron ore as we wrote last week, has gone through something of a mini-rally driven in part by dwindling Chinese port stocks prompting the impression supply is more limited than originally thought and by announcements of mine closures among smaller producers in places such as Iran and Mozambique.

As Iron ore falls reversed and the price rose 30% since the start of April, coking coal could only look on from the sidelines, continuing its fall from over $300 per metric ton four years ago to below $90 now. The latest quarterly metallurgical coal prices have been concluded at the lowest level in more than a decade as quarterly contract prices follow spot prices downward.

Coking Coal: What Are We? Chopped Liver?

Unfortunately for coking or metallurgical coal, even the token supplier rationalization we have seen in iron ore has not been mirrored for coal. Chinese producers, many state owned have actually increased production last year and, according to the Financial Times, China has become a net exporter of coking coal and its derivatives. China’s coking coal imports fell 24.2% in the first four months of 2015 over the same period last year, no doubt aiding the statistics as marginal suppliers were squeezed out the market.

North American Supply Displaced

Australia still supplies some 50% of imports but Mongolia is becoming increasingly important at the expense of Canadian and Russian supplies. To the extent that the US can no longer competitively supply China. Canadian material may also be displaced as prices in North America will be correspondingly depressed further in the second half of the year as suppliers chase the local market.

The most recent statistics from China quoted by Reuters suggest domestic coking coal may finally be plateauing. May’s number was down 4.2% compared to a year ago and that suggests even domestic suppliers are struggling. There is little on the horizon to offer coal suppliers much optimism but steel mills and steel consumers will welcome the reduction in raw material costs for the rest of this year.

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Using robots that can “draw” steel structures in 3D, Dutch technology firm MX3D is planning to 3D “print” a steel bridge over one of Amsterdam’s famous canals in the center of the Dutch Capital. MX3D researches and develops robotic 3D printing delivery technology as well as projects such as the pedestrian bridge. The robots creating the will actually be large welder robots usually seen in factories rather than construction sites.

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The project is a collaboration between MX3D, design software company Autodesk, construction company Heijmans and many others. Designing and “printing” the intricate, ornate metal bridge is a test for the robots, software engineers, craftsmen and designers working on it, including designer Joris Laarman Lab.

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The planned steel pedestrian bridge in Amsterdam will be built by robot “welders” who 3D print the bridge from each side and meet in the middle. Image courtesy of Joris Laarman for MX3D.

“I strongly believe in the future of digital production and local production, in ‘the new craft,'” said Joris Laarman, principal of the Joris Laarman Lab. “This bridge will show how 3D printing finally enters the world of large-scale, functional objects and sustainable materials while allowing unprecedented freedom of form. The symbolism of the bridge is a beautiful metaphor to connect the technology of the future with the old city, in a way that brings out the best of both worlds.”

Bridge Welding Robots

MX3D will equip its multi-axis industrial robots with 3D printing hardware that can print metals, plastics and combinations of materials in virtually any form. The system is controlled by software developed by MX3D with support of new-generation tools from Autodesk, such as Autodesk Dynamo, an open-source design tool that can create algorithms to automate the creation of plans for complex geometric form such as those used in the Amsterdam bridge.

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Utilizing a process known as digital digital laser sintering, Amsterdam’s new pedestrian bridge will actually be welded in place in the field by large robots and not printed in a factory. Image courtesy of MX3D.

From large construction to small parts, the manufacturing techniques MX3D uses enables printing of strong, complex structures made of durable material, in this case ornate steel. It is more cost-effective and scalable than other 3D printing methods for projects such as the pedestrian bridge.

Construction Potential

“What distinguishes our technology from traditional 3D printing methods is that we work according to the ‘Printing Outside the box’ principle,” said Tim Geurtjens, CTO of MX3D. “By printing with 6-axis industrial robots, we are no longer limited to a square box in which everything happens. Printing a functional, life-size bridge is of course the ideal way to showcase the endless possibilities of this technique.”

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MX3D welder/sinterer/printer robot. Image courtesy of MX3D/Adriaan de Groot.

The project achieves one long-term goal of 3D printing supporters in that it delivers a project outside of the traditional confines of the technology, small parts created in a small printer in a manufacturing environment. This means possible on-site use by construction companies and more accurate quantities of welding/sintering material for metals buyers.

Of course, many more projects such as this one would be needed to prove the technology can work with modern construction methods.

“The MX3D platform is a potential game changer,” said Maurice Conti, Director Strategic Innovation at Autodesk. “Breaking free of the traditional limitations of additive manufacturing — small size prints and poor material performance — this technology opens up possibilities for architectural-scale, relatively low-cost, metal structures that are as complex as the designer’s imagination.”

Which Amsterdam canal the bridge will be built to span has not yet been announced but a visitor center accompanying the project is planned to open in September and construction and “printing” is expected to begin around the same time.

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Indian steel, aluminum and copper companies are pinning their hopes on India’s defense sector to help increase sales.

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The government’s “Make in India” campaign, a broad sweep enveloping the entire manufacturing sector, and, as a result, the metals and mining sectors, is expected to boost local raw materials used in defense applications.

The government raised the threshold for foreign direct investment in defense to 49% and has done away with licensing requirements for most items. Several Indian companies such as Tata Steel, Reliance Industries, Mahindra, Larsen & Toubro and others have started identifying areas of defense production their products fit in. They have also started scouting around for foreign partnerships and technology transfers.

International Joint-Venture Partners

One such international player that has in the past shown active interest in this sector is Germany’s ThyssenKrupp AG. The company is reportedly pursuing two interests in the defense field – naval weapons, specifically submarines, and aerospace.

In a recent interview with the Business Standard, Michael Thiemann, CEO of the company’s India region revealed that ThyssenKrupp India Pvt. Ltd was looking to expand its business in not only these segments but was also interested in investing in “smart” cities.

Thiemann said his company was already in discussion with public sector and private shipyards on the submarine front. The CEO let on that his company was open to tying up with private Indian companies such as Larsen and Toubro Ltd. for defense projects.

Project 75

“Project 75,” a plan for the construction of six submarines for the Indian Navy has been in the pipeline for several years now, but with the Make In India campaign it has caught a second wind.

Going by media reports here, the Indian government is likely to shortlist shipyards for the project in about two months. Thiemann said Thyssenkrupp has the technology and expertise and is willing to collaborate with Indian companies, by offering design, engineering and implementation know how.

Thyssenkrupp’s Edge

ThyssenKrupp already makes mining equipment and cement in India. But specifically, where the defense sector is concerned, ThyssenKrupp, say analysts, may have an edge because one of its group companies, ThyssenKrupp Marine Systems (TKMS) has been a partnering with the Indian Navy for more than two decades. Some of the Indian Navy’s previous submarines were made in India under a technology-transfer agreement in which TKMS was involved.

ThyssenKrupp has already invested in a service center at Bengaluru in South India for material processing of aluminum and titanium used in the manufacture of aircraft. The current revenue size of India’s aerospace business is nothing to write home about, but it is expected to grow because of the decisions made by the government.

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Outokumpu has a competitive advantage that it hasn’t capitalized on and given the state of the stainless market we, quite frankly, can’t understand why.

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Outokumpu appears to be the only mill in North America that produces cold-rolled stainless steel 72 inches wide. But we’re not sure if anybody really knows that.

Coming from the mills, I believe each mill should focus on their competitive advantages, and Outokumpu is the only North American mill producing 72-inch-wide stainless. The US market for 72-inch-wide material has been historically served by imports from Outokumpu, Aperam and Tisco.

The Marketing Path is Well Paved

Outokumpu need not reinvent a marketing strategy to sell 72-inch-wide products. They only need to look at one of their direct competitors, North American Stainless.

In fact, Outokumpu ought to adopt the NAS strategy for 60-inch wide. Let’s flash back in time to about 25 years ago. Nobody used 60-inch-wide material. 60-inch wide was sold at a premium above 48-inch wide. It made sense for NAS to sell 60-inch wide at the same price, or even a cheaper price, as it optimized the full width of its rolling mills. Once the price difference went by the wayside, there were no penalties for buying wider material. Guess what? The market took off. Outokumpu should be deploying the same strategy.

It’s a Big, Wide Market

The market for 72-inch wide remains untapped. As I visited customers while working for a service center, I became interested in how many had wide lasers or other processing equipment. Other markets such as carbon steel and aluminum use wide material. Other markets such as carbon steel and aluminum use wide material. I saw that many customers had invested in new wider equipment. My hypothesis: I don’t think many buying organizations really know that 72-inch wide material is produced domestically.

That domestic capability ought to attract the attention of large cold-rolled stainless steel buying organizations.

Instead of stainless mills fighting for the same piece of pie, they need to focus on their respective competitive advantages. Outokumpu ought to be filling one of its three cold-rolling mills with 72-inch-wide orders. We just haven’t seen much promotion of this capability. The same holds true for Allegheny Technologies. Although Allegheny’s hot-rolling mill can go to 78.74-inch-wide, none of their cold-rolling processes are built around it. So, the best they can offer is to be an alternative for 60-inch wide, which in itself is not a bad thing. From a buyer’s perspective, competition is always good.

What This Means for Buyers

Wider is definitely better when it comes to welding. Wider widths help to reduce the number of welds needed. The last time we checked, welders were in short supply.

It’s pretty simple, Outokumpu: get rid of that premium and start making it attractive for people to buy your products. We’re pretty sure that will help fill that mill!

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

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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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