It may be strong political lobbying or maybe a perception that the industry is crucial for economic development, but the aerospace and shipping industries have certainly avoided the worst of environmental regulation over the last decade or so.
The energy and heavy industry sectors have borne the brunt of what some would call over-regulation. But that’s all about to change. 191 Countries gathered in Montréal last week to adopt a global market-based system to tackle the rise of carbon emissions from international air travel an article in the Telegraph explains.
Under the new deal, airlines will be expected to offset their emissions growth after 2020 by buying “offset credits” in line with their carbon footprint, the terms of the agreement layout. The carbon costs are expected to incentivize the industry to develop lower carbon fuels and more efficient technologies, according to the newspaper. Read more
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.
Okay, so who’s the most successful aircraft maker in the world? Yes I know it’s a silly question, it depends on how you define successful but the two behemoths, Airbus and Boeing, have just released numbers for the fourth quarter that top off their 2014 performance.
The FT reports Airbus hit a new production record to supply 629 aircraft in 2014, marking 13 consecutive years of increased deliveries. Not to be outdone, Boeing delivered 723 aircraft in the period, making the US group the world’s largest manufacturer of aircraft for the third year in a row. So colors to Boeing then? Well, not quite because according to the Telegraph Airbus booked 1,456 net new orders for its aircraft in 2014 – net aircraft being new orders less cancellations, their second-best year ever and down only 3% on 2013 when they sold 1,503 aircraft.
Not THAT kind of dogfight! Source: Istock.com
Boeing, by comparison, booked 1,432 new orders in 2014 so, counting new orders, Airbus came out on top. Both firms have massive forward-order books, or a backlog on deliveries depending on how you want to term it. This is great for suppliers, both mills and distributors, who can see a book of business stretching off into the future. No wonder aluminum extrusion and plate mills capable of meeting the requirements of the aerospace industry are investing with more confidence in capacity and supply chain logistics than any other – with the notable exception of automotive which, like aerospace, appears to be on a long-term growth trend for aluminum consumption.
The Boeing Company, long known for its extensive supply chain management practices (not counting the recent 787 Dreamliner debacle), is one US-based OEM that can teach us a lot about metals procurement.
Procurement of the raw materials that go into the aerospace OEM’s products, including but certainly not limited to aluminum and titanium and its alloys, is quite a job considering the thousands of parts that go into a typical Boeing aircraft. And the competition spurred by newly developed materials, such as plastic and carbon fiber composites, give the old dogs a run for their money.
These costs of airplane development, and how aluminum procurement by Boeing as a major OEM reflects their management of suppliers and supply chain, are naturally what MetalMiner is interested in. So we did a Q&A with Jeff Carpenter, Senior Procurement Manager, Raw Materials, of Boeing Commercial Airplanes Supplier Management:
In all seriousness, however, as a friend of MetalMiner once put it: “While far from perfect, I can’t think of a company that has done a better job putting in place the systems and processes to monitor and managing each node in the supply chain. For example, Boeing buys mountains of titanium and aluminum to ensure that raw materials are never the reason a part is late. How many aircraft manufacturers can say the same?”
Jeff Carpenter, senior procurement manager, raw materials, of Boeing Commercial Airplanes Supplier Management, spoke to that sentiment in Part One of MetalMiner’s Q&A with him, specifically on how Boeing goes about buying their aluminum.
Now, Finland-developed technology using carbon fiber in elevator cables is threatening to replace heavier steel cable in new skyscrapers, according to an article in the Economist. According to Johannes de Jong, Kone’s head of technology for large projects, “the steel ropes in a 400-metre-high lift weigh about 18,650kg. An UltraRope for such a lift would weigh 1,170kg. Altogether, the lift using the UltraRope would weigh 45% less than the one with the steel rope,” according to the article.
However, there’s a silver lining here for both aluminum and steel.
Alcoa Inc. (AA) and the Boeing Company (BA) have come together to create a “closed-loop” recycling program, streamlining the aluminum supply chain between the aluminum producer and aerospace OEM, according to a recent announcement made at the Paris Air Show.
The move will recycle aerospace-grade aluminum alloys in Boeing’s plane production process, as well as eventually cut down on the aluminum scrap generated by their suppliers. From the press release: “The program calls for recycling of 2XXX and 7XXX-series aluminum alloys used in the production of wing and fuselage components of Boeing airplanes. The forms will include aluminum extrusions, sheet and plate products.”
For a bit of context, “at the outset, approximately 8 million pounds of aluminum is expected to be recycled annually.”
Meanwhile, several aluminum prices tumbled on the weeklyAluminum MMI®…
Boeing CEO James McNerney threw down the gauntlet: “They [Airbus] don’t have the appetite to do a ground-up airplane, and they’d have to do a ground-up airplane.”
Tom Enders, the CEO of Airbus’s parent, European Aeronautic Defence & Space, or EADS, hit back: “The aircraft we rolled out a couple of weeks ago didn’t have rivets from Wal-Mart, like the ones our competitors had at the time of their roll-out.”
Boeing is not only picking on someone their own size; they’re also picking on much smaller parties. According to a few articles earlier this week, “McNerney told attendees at the company’s annual investor conference that suppliers will have to agree to cut their prices as contracts are renewed, or they’ll be cut from the Boeing team.
‘We have no-fly lists across the company,” McNerney was quoted as saying. “If a certain group is not working with us … they’ll be on a no-fly list. They’ll not be allowed to bid on new programs with Boeing.'”
According to the Dayton Business Journal, “Boeing has roughly 500 suppliers in Ohio — supporting an estimated 250,000 direct and indirect jobs in the state — and spent about $8.3 billion in purchases from Ohio companies in 2011, according to company officials. The aerospace giant also has 600 employees across Ohio and more than 6,600 retirees.”
That would be quite a different – yet interesting – catfight.
In terms of aerospace raw materials, most aluminum prices on our MetalMiner IndX℠ increased over the past week.
A 1.9 percent increase made the Indian aluminum cash price the week’s biggest mover on the weekly Aluminum MMI®. Following a 2.1 percent increase in the week prior, the primary aluminum cash price fell 0.9 percent on the LME last week to $1,821 per metric ton. The aluminum 3-month price fell 0.7 percent on the LME to $1,857 per metric ton after rising 2.0 percent the week before.
Chinese aluminum prices were mixed for the week. The price of Chinese aluminum billet rose 0.3 percent over the past week. This was the third week in a row of increasing prices. Closing out the third week of rising prices, the Chinese aluminum cash price increased by 0.3 percent. Chinese aluminum bar remained essentially flat from the previous week.
European 5083 plate saw its price rise 0.7 percent over the past week. European 1050 aluminum saw a 0.7 percent decline over the past week. The week finished with no movement for Korean 3003 coil premium over 1050 sheet. The price of Korean 5052 coil premium over 1050 sheet did not change since the previous week.
The Aluminum MMI® collects and weights 12 global aluminum price points to provide a unique view into aluminum price trends. For more information on the Aluminum MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.
The phrase “design for manufacturability” takes on new relevance for Boeing as they offered up their latest solution to solve the 787 Dreamliner’s lithium-ion battery woes.
According to the New York Times, the fixes require quite a bit of re-working, in that the proposed Boeing solution now involves a titanium venting system and steel box that would add 150 pounds to the weight of the plane – which may eliminate the weight savings from using the lithium-ion battery in the first place.
That solution comes as a result of what many believe to be the root cause of the battery failures – that too much energy generates too much heat, and the battery lacks an effective cooling mechanism to help dissipate the energy.
In other words, “it’s very possible that [the battery] could heat itself to the point at which it would burst into flames,” said Donald Sadoway, an MIT professor and battery researcher, as quoted in this article.
But what if something else entirely is causing the battery issue? Read more