Titanium

rusty iron chainlinksThe deadlock between Ukraine ­and Russia ­– particularly over Crimea, the current battleground where the US and the EU have joined the fray – got us thinking, “Man, there must be some massive supply chain implications here.”

And there definitely are – for pricing, availability, lead times across a broad range of commodities, parts, components and finished products, far beyond the immediate region itself.

It is our view that the political front is the one to watch, as impending sanctions on Russia imposed by the US/EU would be the main catalyst for supply chain upheaval. On the non-metal commodity front:

  • According to JPMorgan Commodities Research analysts, although Ukraine is neither a major oil producer nor oil consumer, it is the key “middleman” country for Russian energy exports. More than 70 percent of Russia’s gas and oil flows to Europe pass through its territory. In turn, Europe is the buyer for nearly 90 percent of Russia’s oil exports.
  • If tension escalates, namely if military action is undertaken, pipelines could potentially be cut off and actual delays or shortages could hamper western (EU) supply.

On the metals front, several key US manufacturers’ supply chains could feel reverberations due to their business in Russia (especially if US/EU sanctions directly affect them). For example:

  • Boeing Co. buys nearly a third of its titanium for its planes (translating into an $18 million total spend) from Russia, mostly from VSMPO-Avisma, which is the largest titanium producer in the world, according to the WSJ.
  • If the supply chain is impeded in any way, the perception of “slow availability” could drive titanium prices to rise, even though Boeing’s long-term contracts with VSMPO-Avisma lock in price.
  • VSMPO-Avisma also does business with Alcoa.

So what are five specific takeaways for a procurement organization? Jason Busch of Spend Matters dives deep on that frontclick here to read them right now.

From fake knees to models of the Sagrada Familia, 3D printing and additive manufacturing have seemingly taken the industrial world by storm.

Or at least that’s what the industry would like potential customers and users to think – which is what’s worried the industrial manufacturing sector the past couple years.

However, MetalMiner is happy to report that traditional machining and fabrication methods don’t seem like they’ll be going away anytime soon. Why?

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India has taken another step in the production of titanium sponge when the well-known public sector steel producer, the Steel Authority of India Limited (SAIL), signed an agreement with the Kerala State Industrial Development Corp (KSIDC) and Kerala Minerals and Metals Ltd (KMML) to jointly set up an approximately US $458 million plant to produce titanium sponge and metals, according to the Times of India.

Titanium sponge is a porous substance formed in the first stage of the processing of the naturally available titanium.

Titanium is known for its excellent corrosion resistance, high strength and low-density properties, which make it widely used in the manufacture of civilian and military aircraft. Titanium-alloy components are also used in satellite launch vehicles, rockets and missiles.

(Ed. Note: It also happens to be a strategic/critical metal to the United States, as our friends at the American Resources Policy Network put it at the top of their Risk Pyramid.)

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The Economist covered an industrial development in a recent article entitled “A Tantalising Prospect” that would catch the eye of anyone remotely interested in the metal industry.

The process described effectively allows the reduction of high-melting-point metal ores such as titanium, tantalum, and potentially other expensive metallic elements including neodymium, tungsten and vanadium, from the oxide to the metal in powder form.

The process is a type of electrolysis, but rather than hold the metal oxides in liquid form, it holds them as metal powders in a liquid salt at much lower temperatures and hence requires much lower energy inputs than would be the case if they were reduced in the liquid state.

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MetalMiner (and our parent organization, Azul Partners) has been quietly building up a cool business the past few years. The only thing increasing faster at the moment than our revenue and cross-site traffic — we’re currently up to nearly 100,000 unique visitors and over 300,000 visits per month across our four sites — is the quantity of thought leadership we’ve been publishing both in blog and research paper formats.

Yet we haven’t always focused so heavily on publishing.

Before MetalMiner became a preeminent site in the metals and supply chain market, the founders ran a successful consultancy focused on metals cost reduction for manufacturers. The blog, in fact, was originally just a ploy to position the firm’s expertise and services (my, how a few years can change everything!).

But as MetalMiner grew to such a level where not pursuing publishing as the full-time focus would have denied the chance to carve out a high-growth niche in the market for information and insight, the original team scaled back on our metals advisory work.

Now, with a greatly expanded organization with additional team members and a broader portfolio of sites and talent to draw on, MetalMiner and our sister site Spend Matters are once again providing highly specialized knowledge and services to clients through a new advisory firm: Spend Matters Group.

Spend Matters Group is taking a targeted role across the broader sites, serving as an advisory firm focused entirely on serving specialized needs, delivering services both direct to manufacturers as well as through third-party firms (e.g., consultancies) looking to uniquely advise their clients.

When it comes to metals specifically, Spend Matters Group (with MetalMiner resources) can identify and implement cost savings or cost avoidance strategies that the great majority of practitioners have not even heard of before. And we can do it in categories that others won’t touch (e.g., heat treat services or electro-plating). Our engagement model leverages proprietary MetalMiner IndX℠ pricing data and forecasting models and a general metals procurement bag of tricks that simply does not exist elsewhere in the market.

Our metals advisory expertise for global manufacturers spans the following raw metals and metal component categories:

•    Aluminum, Copper, Nickel, Steel, Stainless, Titanium, Rare Earths

•    Primary metal, ingots, sows, billets

•    Semis, sheet/plate, extrusions in all forms, including pipes and tubes

•    Fittings, flanges, anodized sections, painted sections, painted sheet/coil

•    Semi-finished special sections for the defense industry

•    Plain and printed foil

Our metals component strategy and cost reduction expertise includes: castings, fasteners, bushings, levers, shafts, fabricated parts, forgings, machined parts, mattress innersprings, sheet metal, stampings and forged and machined blocks for molding and general engineering applications.

Whether formulating a range of sourcing and category management approaches (e.g., global sourcing, mill-direct, distributor, multi-tier supply chain sourcing, demand aggregation strategies, etc.) or developing statistical modeling/forecasting and hedging approaches across metals spend, MetalMiner’s advisory services can bring a laser-focused approach to metals category insight.

We also can help with developing conflict minerals (Dodd-Frank) traceability programs as well implementing metals rebate programs, index-based bidding strategies, VMI initiatives, consignment schedules and total landed cost models – including the skills processes and technologies that make it all possible.

Spend Matters Group (and MetalMiner) work with the entire metals value chain, from producers to manufacturers — and everyone in between. Whether you’re a consultancy looking for subject matter expertise as part of a client engagement (or to develop internal skills/competencies), or a manufacturer, distributor or producer looking to leverage the services of Spend Matters Group and MetalMiner directly, we look forward to hearing about your challenges, opportunities, and ways we might be able to help.

Learn more here.

The manufacturing world got some news late last week that is neither entirely uplifting nor completely dispiriting. The good news is that industrial production and capacity utilization did not decrease last month. The upward trend for US manufacturing continues, and we hope that it’s a sustainable one.

Growth continues, but not at eyebrow-lifting rates. According to the latest Fed figures, capacity utilization grew by 0.1 percent, from 77.3 to 77.4 percent. Industrial production was flat from January to February, but is likely to show an increase upon later revision — production figures initially showed no change for January, subsequently getting revised to show an increase of 0.4 percent.

The bottom line seems to point to one dominant issue (and two sub-factors) that challenges manufacturers and other sourcing organizations: uncertainty, brought on by 1) commodity/raw material price volatility; and by 2) the government policy landscape.

Commodity Price Volatility

Following the latest ISM PMI figure, which also decreased month-on-month in February but remained in positive growth territory, companies voiced concern over price volatility.

“Business is holding steady. Concern over commodity prices ongoing,” a chemical products manufacturer responded to the ISM survey. Another respondent, working in the machinery sector, said “”Still somewhat cautious about recovery. Expecting a good year, but not seeing orders yet.”

All metal categories were reported to be up in price for buyers, including aluminum products, copper products, rolled steel, scrap and titanium dioxide. The only commodity down in price was natural gas (which seems to be a trend that US and EU manufacturers are taking advantage of for the long term — see GM’s plans for natural gas vehicles, and a report claiming that 1 in 3 large vehicles in Europe will run on LNG by 2035.)

Manufacturing-Friendly Government Policy

Economist Chad Moutray, writing in the National Association of Manufacturers’ (NAM) Shopfloor blog, said that in order to see continued growth across all manufacturing sectors, Washington must put through more business-friendly policies.

This issue will be directly addressed at Day 2 of our conference, Commodity EDGE: Sourcing Intelligence for the New Normal. (The kickoff sessions begin later today!) Attendees will get both US and European policy perspectives at the panel discussion, “Public Policies Sure to Impact Sourcing Organizations.” 

Jennifer Diggins (Director, Public Affairs for Nucor Corporation) provides incisive policy viewpoints from the domestic steel industry’s perspective.

Thierry Decocq (Founder and Managing Partner of YQ Purchasing in Belgium) leverages creativity in the procurement process — if government policies are unbending, the wisdom goes, there must be more creative ways to structure your buys to help your margins.

And Mike Zadoroznyj knows a thing or two about regulatory compliance. As VP Product Center, Treasury and Regulatory Compliance Division at Triple Point Technology, Mike’s insight can help navigate manufacturers through periods of uncertainty.

In our messy policy landscape, manufacturers need to know which policies not only affect their business today, but which ones will rear their heads in the future. Uncertainty in prices and policies may reign for now, but equipping yourself with strategic sourcing practices to best meet those challenges — that’s up to you.

*Make sure to visit MetalMiner all day tomorrow for the latest updates from our panel discussions, keynotes speeches and breakout sessions!

Continued from Part One.

The MOM surfaces are cast and then machined to size and finally polished to a mirror finish to create a perfect fit. The idea is, a perfect fit means the surfaces should never touch each other, according to Dr. Timothy Wright, Kirby Chair of Orthopedic Biomechanics: “Just like the cylinder in an engine block,” he said.

But controversy has also arisen about the way surgeons fit these devices. The femoral head may be polished to a mirror surface, but then the ball surface is hammered into the thigh bone with a mallet, raising the question: how perfect is that fit going to be on assembly of the ball into the socket after such a process?

Nor is the problem confined to full hip replacements. The “replacement light” option of applying a metal coating to the patient’s existing femur and a metal lining to the pelvic socket has suffered similar problems of metallic ion contamination of the blood, suggesting heavy-handed surgery work on the full hip replacements is, at best, only part of the problem.

The use of MOM hip replacement devices has been dramatically reduced with DuPuy’s ASR model, along with others, since being removed from the market in September 2010. The worry for the industry is toxicity caused by MOM joints may cause a backlash against use of metal components and hasten development of ceramic and plastic alternatives. Already new ceramic materials are far less brittle than earlier types, opening up the prospect of extremely close tolerance viable ceramic joints in place of metal on plastic designs.

Joint manufacturers and the medical profession knew of these problems as far back as 2006 and have since done little more than monitor rejections and failures; so one has to say, if the repercussion is a dilution of a metals-dominant role, the medical industry will have done the metals industry a considerable disservice.

The metals industry is rightly proud and producers understandably value the successful application of metal alloys in the medical implants industry. From high-purity refining through forging and casting operations, machining, coating and treating the use of titanium, cobalt, chrome and stainless steels in addition to a number of less common metals, this has been a source of considerable profit for the sector over recent decades.

So the current furor about metal-on-metal (MOM) hip implants has understandably stirred up a lot of debate and not a little media hype into the bargain.

Here in the UK, a recent BBC Newsnight program and British Medical Journal (BMJ) report have thrust the debate into the public domain and a flurry of articles have played up the potential risks — risks that could ultimately lead to a sharp decline in the use of metal alloy implants if subsequent research supports early fears.

The procedure of hip implants has been around since the 1970s, but over time the materials and designs have changed as lessons have been learned. Earlier problems with stainless steel and post-operative dislocations have encouraged a move to cobalt-chrome and titanium alloys for the femoral head (the ball-shaped section with a spike that fits in the femur or thigh bone) and gradually larger femoral heads to counter the tendency to dislocate.

To reduce wear rates found in earlier metal-to-plastic joints, metal-to-metal joints were developed by a number of producers, but notably Johnson & Johnson’s subsidiary DuPuy. As a result, possibly of the larger surface area resulting from larger heads, tests have revealed that minute metal particles worn from the metal-to-metal contact are finding their way into the surrounding tissue and bloodstream.

An article in the Independent says metal ions appear to break off from the implants and leak into the blood, causing local reactions that destroy muscle and bone, cause severe pain and even long-term disability. Studies have shown that the metal particles can seep into the bloodstream, spreading to the lymph nodes, spleen, liver and kidneys before being excreted in urine. There are also concerns about damage to chromosomes, leading to genetic changes that could increase the risk of cancers.

The BMJ report is probably the best source of impartial information on the topic, even giving measured toxicity levels for cobalt and chromium blood tests. The Telegraph recently reported that in the US, experts studied 46 MOM implants retrieved from 44 patients at the Hospital for Special Surgery, in New York, where all implants removed from patients are kept for study.

They found that 98 percent of the cups of the implant and 93 percent of the heads showed moderate to severe scratching. Moderate to severe pitting was found in 43 percent of the cups and 67 percent of the heads; and near the cups and heads, the implants had completely lost their sheen.

Continued later today in Part Two.

Source: planespotters.net

It may indeed by a good holiday season for the likes of Boeing, as they sewed up contracts of considerable size with emerging markets, to begin supplying planes for the next couple decades.

Of course, their tussles with Airbus always keep things interesting, and Chinese and Russian plane-makers are joining the game as well. Some of our best-read aerospace posts of 2011:

1. Boeing and Airbus Put on Notice: China’s Comac Breaking Up the Duopoly Party

2. Not So Fast, Comac: C919 is DOA, But Boeing and Airbus Duopoly Dead Anyway

3. Aerospace Booming, Supply Chain at Risk

–Taras Berezowsky

Like you, I have now read probably half a dozen pieces on the amazing contributions of Steve Jobs. A visionary, an innovator, Thomas Edison-like, perhaps our modern Albert Einstein¦we’ll leave the big thoughts to others. But in our world of metals, we have only one observation — nobody has made metals as sexy and as cool as Steve Jobs.

Steve Jobs left a profound legacy for anyone that produces, fabricates, casts, pours, bends, stamps, shears, slits, extrudes, shapes or pours metal.

We here at MetalMiner, especially my colleague Nate Burgos, have often written about Apple’s achievements in product design. We pay tribute now to some of these.

Whether it’s the metal used in the basic design of key products:

Metal In Apple’s Design Language


Photograph by Shrine of Mac


Photograph by MailCones, Flickr


Photograph by mackeer, Flickr

or the more “progressive” selection of glass (vs. plastic) that relies upon exotic metals such as indium, Complementing Aluminum iPad’s Magnetism and Glass:

A model flexes a piece of Corning’s Gorilla Glass. Source: Corning, Inc./AP

or to liquid injected metal Apple’s Manufacturing Move to Liquid Metal

or the stainless steel case in the iPhone 4, Elegant Design Steel Bound iPhone 4

Detail of iPhone 4 by Apple, Inc.

to my personal favorite, the aluminum behind the new notebook (in my case, the MacBook Air, which I love) Aluminum Brick Behind Apple Notebook

to spreading the wealth to a host of Apple accessory suppliers Happy Days for Apple’s Metal Casting Suppliers:

Apple iPod cases made by Catcher Technology.

iPhone cases.

A Macbook frame.

Catcher’s touch panels. Photos: Catcher Technology

Catcher has the capability of extruding and casting a variety of tech parts.

…it’s undeniable that Steve Jobs has done for metals what Henry Ford did for auto production.

Perhaps it was Jobs himself who said he liked to play in the intersection of liberal arts and technology. We’d argue liberal arts and technology with a preference for metals. This industry will likely never see another advocate like Steve Jobs again.

–Lisa Reisman