Industry News

In January 2015, Saudi Arabian company ACWA Power surprised industry analysts when it won a bid to build a 200-megawatt solar power plant in Dubai that will be able to produce electricity for 6 cents per kilowatt-hour.

Why Manufacturers Need to Ditch Purchase Price Variance

That price was less than the cost of electricity from natural gas or coal-fired power plants, a first for a solar installation. Electricity from new natural gas and coal plants would cost an estimated 6.4 cents and 9.6 cents per kWh, respectively, according to the US Energy Information Agency.

Technological advances, including crystalline silicon-solar photovoltaic panels can now convert higher percentages of sunlight into energy and have made solar panels more efficient. As a result, we may be seeing a long-awaited rise in the price of silicon used for the panels, microchips and semiconductors. The week's biggest mover on the weekly Renewables MMI® was the price of silicon, which saw a 7.4% increase.

Last week, manufacturer SolarCity began construction on a $900 million, 1 million-square foot PV panel factory in Buffalo, as well.

The price of silicon rose 7.4% on the renewables MMI last week.

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Construction spending falling again was the big news in today’s MetalCrawler report. The race for world’s largest steelmaker by market value heated up, too.

Construction Spending Falls

Outlays for US construction projects fell 0.6% in March to a seasonally adjusted annual rate of $967 billion, the Commerce Department reported Friday.

Why Manufacturers Need to Ditch Purchase Price Variance

Economists polled by MarketWatch expected a drop of 0.5%, compared with an originally reported decrease of 0.1% in February. On Friday, the government revised February’s result to show almost no change. Looking at private outlays in March, spending fell 1.6% for residential projects, and rose 1% for nonresidential projects. For overall public construction projects, spending fell 1.5%.

Baosteel Keeps Growing

Baoshan Iron & Steel Co., spurred by China’s stock-market rally and growing car market, is poised to overtake Japan’s Nippon Steel & Sumitomo Metal Corp. as the world’s largest steelmaker by market value.

Baosteel, supplier of half of China’s automotive steel, had a market capitalization of $23.8 billion to Nippon Steel’s $25 billion on Thursday. The spread on Tuesday was only $52 million. Also tracked in the attached chart is South Korea’s Posco, which wrestled with the Japanese steelmaker for the crown from 2013 until last year.

Shares of Shanghai-based Baosteel more than doubled in local-currency terms since Oct. 30 as the benchmark Shanghai Composite Index rallied 86% Nippon Steel’s stock rose 14% and Posco fell 18% in the same period.

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The Wall Street Journal reported that a key component of the Apple Watch made by one of two suppliers was found to be defective, prompting Apple Inc. to limit the availability of the highly anticipated new product, according to people familiar with the matter.

Why Manufacturers Need to Ditch Purchase Price Variance

The part is the watch’s “taptic engine,” designed by Apple to produce the sensation of being tapped on the wrist. After mass production began in February, reliability tests revealed that some taptic engines supplied by AAC Technologies Holdings Inc., of Shenzhen, China, started to break down over time, the people familiar with the matter told the WSJ.

No Recall

Apple does not plan a recall, as there is no indication that any defective watches shipped to customers.

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Another day at MetalCrawler and another steelmaker reports a loss due to imports. Also, US economic growth ground nearly to a halt in the first quarter and the US International Trade Commission reaffirmed duties on Chinese steel tubes.

U.S. Q1 Results Disappoint

U.S. Steel Corp. reported a loss and lowered its pretax 2015 earnings forecast by around $500 million, citing “massive” imports, particularly from China, low oil prices and excess inventories.

Why Manufacturers Need to Ditch Purchase Price Variance

The results were worse than expected and pushed the Pittsburgh-based steelmaker’s stock down.

Domestic steelmakers are reeling as prices have dropped to their lowest levels since the 2009 financial crisis. The benchmark hot-rolled coil index has declined 26% since the start of the year, to $444 per ton.

U.S. Steel Chief Executive Mario Longhi called market conditions “extremely difficult” as the company, in a statement, blamed imports and oil prices.

Overall steel imports into the US rose 14% to 7.9 million tons during the first two months of 2015, according to Global Trade Information Services. The US imported 397,062 tons of steel from China during that time, up 24% from the same period a year before.

US Economy Barely Grows

The US economy skidded to a near halt in the first three months of the year, battered by harsh weather, plunging exports and sharp cutbacks in oil and gas drilling.

The overall economy grew at a barely discernible annual rate of 0.2% in the January-March quarter, the Commerce Department reported Wednesday. That is the poorest showing in a year and down from 2.2% growth in the fourth quarter.

ITC Affirms Steel Oil Tube Tariffs

The US International Trade Commission (ITC) voted unanimously that US producers were injured by subsidized imports of oil country tubular goods (OCTG) from China. The ITC decision affirms countervailing duties (CVD) of 10-16% established earlier this year by the Commerce Dept. Commerce will now issue a countervailing duty order on the Chinese imports as a result of the ITC’s affirmative determination.

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Today in MetalCrawler, losses widened at a major stainless steel manufacturer, an aluminum giant gets a new CEO and two design and construction software companies team up for better workflows for HVAC designers and installers.

AK Steel Loss Widens

AK Steel Holding Corp. said its first-quarter loss widened from a year earlier on a big write-down related to its investment in iron-ore pellet joint venture Magnetation LLC.

Why Manufacturers Need to Ditch Purchase Price Variance

Average selling prices fell 8.9% from a year earlier, while shipments increased 39%, with a boost from an acquisition and strong demand from the automotive sector.

Ohio-based AK Steel in March predicted that shipments of carbon and stainless steel to the automotive market would remain strong because of market demand. However, the company warned that it expected its shipments to decline 14% from the fourth quarter to roughly 1.7 million tons on weakness in the carbon steel spot market, which AK Steel attributed to rising imports.

Martens Leaves Novelis

Novelis Inc., the US’ largest aluminum recycling and rolling company, has announced the departure of Philip Martens as the company’s president and CEO. Replacing Martens as president on an interim basis is Steve Fisher. Novelis says it has begun a search for a permanent CEO.

Martens, a former Ford Motor Co. executive, joined Novelis in 2009. During his tenure with Novelis the company shifted its focus toward servicing the automobile industry.

Vulcan Works With AECOsim for Ductwork

Geo-positioning and construction software manufacturer Trimble recently started supporting new construction modeling workflows with enhanced integration between Bentley Systems‘ AECOsim Building Designer software and Trimble’s Vulcan sheet metal cutting software for the HVAC market. The new workflow integration enables design models to be shared easily, securely and accurately. The move expands the companies’ ongoing collaboration around “Construction Modeling” and enhanced information mobility.

Vulcan is a sheet metal cutting software product for HVAC contractors, design/build firms and duct manufacturers, who rely on the software to increase shop productivity, plan duct design and installation and reduce waste.

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Today’s MetalCrawler brings you all the steel news fit to digitally print.

How Big Chinese Mills are Making Money

Plunging iron ore prices are providing a lifeline to some of China’s biggest steel mills and are raising the prospect of a rising tide of exports and increased friction with the European Union, US, India and other export destinations.

Pool 4 Tool’s Automotive SRM Summit

Even as China’s domestic steel demand shrinks and the industry battles chronic overcapacity, lower iron ore prices have helped many large mills post better earnings in 2014 than a year earlier, supported by record exports. Reuters reports that the latest batch of Chinese steel earnings shows just three of 18 big Chinese mills to report so far suffered losses in 2014, down from five the year before. Six of the 13 profit-making mills in 2013 increased profits last year.

Big Chinese mills are able to ship in cheaper seaborne ore direct to their coastal steelmaking operations, selling to customers nearby or shipping steel overseas.

Steel Dynamics Misses

Steel Dynamics Inc. recently reported first-quarter net earnings of $30.8 million or $0.13 per share compared with $38.6 million or $0.17 per share last year.

Excluding items, adjusted earnings for the quarter were $0.17 per share . Revenues for the quarter were $2.05 billion compared with $1.83 billion in the prior year. Analysts polled by Thomson Reuters estimated earnings of $0.15 per share on revenues of $2.15 billion for the quarter.

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In the “news-that-may-not-be-news-to-you” department, we wanted to keep you posted on our site’s mobile-friendly interface. This indeed may not be news to you if you’ve navigated over to MetalMiner using your iPhone, iPad, Samsung Galaxy, Microsoft Surface, Kindle Fire or [insert highfalutin’ smartphone or tablet here], as MM has been mobile-friendly for quite a while now. However, […]

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It’s here! At 9 a.m. CT/10 a.m. ET today (register here, now) Lisa Reisman of MetalMiner and Ian Krol of Bolero (along with MetalMiner’s Stuart Burns and David Gustin of Trade Financing Matters) are about to rock your world on the following: – A 3- and 6-month forecast for major metals including: steel, aluminum, copper and […]

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It’s first quarter earnings day here at MetalCrawler, with major producers mostly taking a hit due to foreign steel exports and low prices.

Nucor’s Big Hit

Nucor Corp., the No. 1 US steelmaker by market value, reported a 39% drop in quarterly profit, hurt by lower selling prices. Net income attributable to Nucor fell to $67.8 million, or 21 cents per share, in the first quarter ended April 4, from $111.0 million, or 35 cents per share, a year earlier.

Free Webinar Tomorrow: MetalMiner’s Q2 and Q3 2015 Forecasts

Net sales fell nearly 14% to $4.40 billion.

ATI, Too

Allegheny Technologies, Inc., issued its quarterly earnings data on Tuesday. The company reported $0.09 earnings per share for the quarter, missing the consensus estimate of $0.10 by $0.01, AnalystRatings.Net reported. The company had revenue of $1.13 billion for the quarter, compared to the consensus estimate of $1.07 billion. During the same quarter in the previous year, the company posted ($0.17) earnings per share. The company’s revenue for the quarter was up 14% on a year-over-year basis even though first quarter profit was down.

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Fresh MetalCrawler news today on the US housing market, China's attempt to restructure its economy and a short-term fix to fund the Highway Trust Fund.

US Housing Starts Disappoint

US housing starts rose far less than expected in March and factory activity in the mid-Atlantic region grew modestly this month, suggesting the economy could struggle to rebound from a soft patch hit in the first quarter.

Free Webinar: What Does the Future Hold? MetalMiner’s Q2 and Q3 Forecasts Can Help You Plan Your Year

There are expectations growth will rebound in the second quarter, but Thursday's lukewarm data suggest the momentum will probably not be strong enough for the Federal Reserve to start raising interest rates before September.

Controlling The Chinese Slowdown

Beijing's efforts to wrestle China's growth model from its investment and credit-fueled addiction to a more sustainable long-term footing, as well as to clean up the environmental damage wrought by decades of industrial pollution, is predictably slowing growth there. The difficult task for Chinese leaders will be to control the slowdown of the world's second-largest economy among calls for stimulus and government help.

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