Articles in Category: Metal Fabricated Parts

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  • Demand from China (and China’s overall economic outlook)
  • The strength of the U.S. Dollar
  • Oil prices and trends

While the 2018 Annual Metals Outlook report is free of charge, we do recommend you pair it with a subscription to our Monthly Metal Buying Outlook report in order to get the most valuable, up-to-date information and analysis of market conditions.

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Following the fortunes of Boeing and Airbus, you could be forgiven for thinking that aircraft manufacturers always run late, over budget, and the resulting end product can struggle to meet initial expectations.

Emrbaer E2

The Embraer E2. Source: Embraer.

But Brazil’s Embraer, the world’s third-largest commercial jet maker, has shown with its next generation narrow body regional aircraft, the E-2 series, that it doesn’t have to be that way. Embraer introduced the aircraft at the Paris Airshow in 2013 and it was first displayed last summer at the Farnborough Airshow just 45 days after its maiden flight. The aircraft is set to be delivered on time, on budget, and even slightly underweight.

Segment Dominance

Embraer has been very successful with their current E-jet series and the new E-2 program looks set to maintain the company’s 55% market share dominance of the regional jet market. The E-2 will commence deliveries in the first half of 2018 and variants will be capable of carrying between 70 and 130 passengers. An FT article notes that Embraer has a backlog of commitments from airlines for 690 E2 aircraft, including firm orders of 275.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

The company has struck a wide-ranging and exclusive arrangement with Alcoa Corp. for aluminum sheet and plate for the wings, skins and fuselages of the model, with other Alcoa products being used in key applications such as wing ribs, fuselage frames and other structural parts. The long-term collaboration is said by Aluminum Today to be worth $470 million to Alcoa. “PurePower” engines will be supplied by Pratt & Whitney. Read more

A Washington, D.C. federal judge on Tuesday rejected the Cheyenne River Sioux Tribe’s bid to block operation of the Dakota Access pipeline on federal land in North Dakota, saying the tribe likely won’t be able to show that the federal government interfered with its exercise of religion on land outside the tribal reservation by allowing the project to go forward.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Judge James Boasberg of the U.S. District Court for the District of Columbia rejected the tribes’ request for an injunction to withdraw permission issued by the U.S. Army Corps of Engineers for the last, eight-mile link of the oil pipeline underneath Lake Oahe in North Dakota. Read more

Rising raw material surcharges are driving up U.S. steel prices, particularly stainless surcharges. The Allegheny Ludlum304 and 316 stainless surcharges rose 34% and 25%, respectively, on the MetalMiner IndX from December to January.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

The chrome portion of our prices jumped month on month and Platts reported that the same thing happened to its stainless benchmarks.

Turner Construction Index Posts Strong 4Q

Turner Construction Company reported recently that its Fourth Quarter 2016 Turner Building Cost Index — which measures costs in the nonresidential building construction market in the U.S. — has increased to a value of 1006. This represents a 1.11% quarterly increase from the Third Quarter 2016 and a 4.90% yearly increase from the Fourth Quarter 2015.

Two-Month Trial: Metal Buying Outlook

The U.S. construction market continues to experience broad growth, with the West and Southeast regions seeing more significant gains, and the Northeast and Central regions seeing more moderate gains. While raw material prices have remained flat, they have experienced an overall gain this year and fabricated material prices have seen a continuous growth this quarter.

The Commerce Department has placed anti-dumping and countervailing duties on mechanical drive parts from Canada and China, some as high as 400% for the latter. U.S. auto sales are forecast to fall this month.

The Auto Sales Plateau Begins to Slope

U.S. auto sales are forecast to drop more than 7% in October from the same period in 2015, the sixth monthly decline so far this year, as automakers offer steep discounts and adjust production to manage inventories, J.D. Power and LMC Automotive said on Friday.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

This may be the fall from the plateau we have seen over the last few months of flat auto sales.

The two auto industry consultants said October U.S. new vehicle sales will number 1.347 million, down 7.3% from 1.453 million units a year earlier. The seasonally adjusted annualized rate for October will be 17.7 million vehicles, down from 18.1 million on the same basis a year earlier. This October has two fewer auto sales days than October of 2015. Read more

Siemens and Local Motors announced a new partnership at the recent International Manufacturing Technology Show in Chicago, which is intended to help advance the future of manufacturing by optimizing the development and large-scale 3D printing of automobiles.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

The partnership combines the power of Siemens’ product lifecycle management (PLM) software technology with Local Motors’ leadership in co-created and 3D-printed vehicles — a process called direct digital manufacturing (DDM), wherein parts are produced directly from CAD files.

IMTS_olli_local_motors_550_092016

All 115,612 International Manufacturing Technology Show attendees could ride Olli, Local Motors’ first 3D-printed, autonomous vehicle to get around the massive show floor. Source: IMTS.

Local Motors plans to enhance productivity in its LM Labs program by leveraging Siemens’ expertise in creating “digital twins,” while Siemens expects to further enhance its digital enterprise software suite to support the latest advances in additive manufacturing/3D printing.

For the first time, Local Motors provided an autonomous vehicle, “Olli” that ferried IMTS goers throughout the halls of McCormick Place. The vehicle used Watson’s capabilities to enable riders to ask complex questions in “natural language” voice such as where to visit in Chicago while in town. Olli can be hailed by an app and is in real-life testing Local Motors testing locations right now including National Harbor, Md., Las Vegas and, later this year, Miami. The autonomous vehicle can take route instructions and explain what’s happening during the trip.

Local Motors brought other 3D-printed vehicles — including Strati, the first 3D-printed show car created at IMTS 2014 — tot the show, too.

On the Siemens side of the partnership, the PLM software provider insists that additive manufacturing is not in direct competition with existing manufacturing processes and will not completely replace them.

“Instead, 3D printing will provide an ideal complement to traditional procedures like injection molding and milling,” said Ulli Klenk, chairman of the board of the Additive Manufacturing Association within VDMA — a German manufacturing association trade and certification association — and also manager of Siemens’ digital factory division.

Two-Month Trial: Metal Buying Outlook

Klenk said the certifications and standards VDMA is working on will bring legitimacy to the technology and, within 10 years, additive manufacturing could effectively be commoditized with 3D printing powders and their prices treated as any other raw materials.

China is planning a bailout of sorts for Bohai Steel Group and standards organization ASTM International wants to develop certifications for commercial space flight.

A New Lifeline for Bohai Steel

Financial authorities in Tianjin, China, plan to convert a portion of debt-stricken Bohai Steel Group‘s liabilities into bonds, according to rescue plans drawn up recently, the online financial magazine Caixin reported on Monday.

MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy

According to the plan, high-quality assets from Bohai Steel will be restructured to form a new company, which will take on 50 billion Chinese yuan of the total debt. Officials met last week to discuss a comprehensive restructuring plan for the firm, which has liabilities of $28.78 billion (192 billion yuan) from 105 creditors.

ASTM Seeks To Develop Private Space Travel Standards

ASTM International will host an organizational meeting to potentially create a new technical committee that develops voluntary consensus standards for commercial spaceflight.

Free Download: The September 2016 MMI Report

This meeting comes in part as a result of the updated U.S. Commercial Space Launch Competitiveness Act of 2015 (SPACE Act). The U.S. Federal Aviation Administration’s Commercial Space Transportation Advisory Committee (COMSTAC) Standards Working Group is recommending the organization of the new group.

Yesterday, Commerce Department placed initial countervailing duty tariffs on imports of circular welded carbon-quality steel pipe from Pakistan.

Free Download: The March 2016 MMI Report

For the purpose of countervailing duty investigations, a countervailable subsidy is financial assistance from foreign governments that benefits the production of goods from foreign companies and is limited to specific enterprises or industries, or is contingent either upon export performance or upon the use of domestic goods over imported goods.

Commerce calculated a preliminary subsidy rate of 64.81% for the mandatory respondent, International Industries Limited. The preliminary subsidy rate is based on facts available and adverse inferences following Commerce’s preliminary determination that the mandatory respondent and the Government of Pakistan had not fully cooperated in the investigation. All other exporters/producers in Pakistan have also been assigned a preliminary subsidy rate of 64.81%.

drillpipe stacked near rig

The investigation covers welded, carbon-quality steel pipes and tube, of circular cross-section, with an outside diameter not more than nominal 16 inches imported from Pakistan. Source: Adobe Stock/ pavelyudin.

Commerce will instruct U.S. Customs and Border Protection to require cash deposits based on these preliminary rates.

The petitioners in this investigation are Bull Moose Tube Company, EXLTUBE, Wheatland Tube, and Western Tube & Conduit.

Free Sample Report: Our April Metal Buying Outlook

The investigation covers welded, carbon-quality steel pipes and tube, of circular cross-section, with an outside diameter of not more than nominal 16 inches, regardless of wall thickness, surface finish, end finish, or industry specification, generally known as standard pipe, fence pipe and tube, sprinkler pipe, and structural pipe.

The Occupational Safety and Health Administration announced last week its final rule to improve protections for workers exposed to respirable silica dust.

Free Download: The March 2016 MMI Report

OSHA says the rule will help prevent lung cancer, silicosis, chronic obstructive pulmonary disease, and kidney disease in workers by limiting their exposure to crystalline silica, which can cause all of the above diseases and disorders when inhaled. The final rule is written as two standards, one for construction and one for general industry and maritime.

This pile of white silica sand is now being more tightly regulated by OSHA. Source: Adobe Stock/Coprid.

This pile of white silica sand is now being more tightly regulated by OSHA. Source: Adobe Stock/Coprid.

Construction companies have until June 23, 2017 to comply with most of the new requirements, such as:

  • Reducing the permissible exposure limit for crystalline silica to 50 micrograms per cubic meter of air, averaged over an eight-hour shift.
  • Mandating employers to use engineering controls (such as water or ventilation) and provide respiratory protection when controls are not able to limit exposures to the permissible level.
  • Limiting access to high exposure areas .
    Training workers to recognize exposures.
  • Provide medical exams to highly exposed workers.
  • OSHA says the new regulations, which replace ones established in 1971, provide greater certainty and ease of compliance to construction employers — including many small employers — by including a table of specified controls they can follow to be in compliance without having to monitor exposures.

Free Sample Report: Our March Metal Buying Outlook

As we’ve mentioned before, the new rules are the culmination of 45 years of debate and consideration of a new silica rule. Regulators have sought to strengthen the 1971 since its inception as silica, in its natural sand state, is pretty much everywhere on construction sites.

Our Stainless MMI remained steady at 51 points. However, we currently see some factors that could lift prices in the short term.

Stainless Anti-dumping Case

On March 4, the U.S. Commerce Department launched an anti-dumping and countervailing duty investigation into Chinese imports of stainless steel sheet and strip, for possible illegal subsidies and selling prices at below cost to illegally gain market share. A preliminary determination of injury to U.S producers is scheduled by March 28.

Stainless_Chart_March-2016_FNL

China’s Ministry of Commerce didn’t respond well to the this new case, arguing that simply restoring prices via protectionist means is not the solution. Chinese steel firms have already been impacted by trade cases. Recently the Commerce Department had imposed 266% preliminary duties on imports of cold-rolled steel from China, punishing Chinese steel makers for dumping or selling below cost. In December, China received a dumping margin of 266% on corrosion-resistant steel products.

Compare Prices With The February 2016 MMI Report

These tariffs have helped U.S. imports come down this year. That led to lower inventory levels here and have given U.S. mills the ability to rise prices. Steel prices climbed over the past few weeks, and stainless prices could follow. With the threat of anti-dumping lawsuits looming, the volume of imported stainless sheet and strip had already been diminishing, which should be seen in the upcoming months. The lack of imports has already pushed out domestic lead times and could create a supply shortage once service center restocking starts. However, it’s still questionable whether prices will hold just on import tariffs alone. Low international prices will add downside pressure if stainless domestic prices rise, especially since China is the only named party.

Nickel Prices Could Rise Short Term

Nickel is the worst performer among base metals this year. However, we are seeing some price strength in the industrial metal complex that could push nickel prices higher in the short term, especially if the US dollar continues to weaken.

Indonesia’s energy minister said in February that the country could ease the ban on nickel ore exports. Indonesia was China’s top nickel ore supply country prior to the ban, which enabled the Philippines to catch up.

Free Sample Report: Our March Metal Buying Outlook

Back in 2014 when the ban was implemented, nickel was trading above $15,000 per metric ton. However, Indonesian companies didn’t expected that nickel would be trading today at half that price.

Indonesia Might Ease Export Ban

Because of falling nickel prices, many of the smelters that miners intended to develop have not materialized. Now, the government is going to review its export ban policy as miners struggle and Indonesia´s smelting capacity will not be sufficient by next year amid miners’ unwillingness to develop those costly smelting operations.

The removal of the export ban would add more nickel supply to international markets, possibly driving prices down while demand is weak, especially in the energy sector.

What This Means For Metal Buyers

Stainless prices could experience a short-term bounce on new import tariffs and overall strength across the base metal complex. However, prices will likely struggle to rise longer term while demand remains weak and producers don’t cut production in a big way.

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