Articles in Category: Product Developments

If “imitation is the sincerest form of flattery, then perhaps being labeled a “disruptor” and compared to the likes of Amazon by an industry luminary isn’t such a bad thing either. Referring to the recent launch of MetalMiner (SM) Benchmark, Denny Oates, CEO and President of Universal Stainless named MetalMiner as a potential “threat” to the industry [stainless] at the recent Specialty Metals Conference hosted by MSCI in March.  

I guess it all depends on your perspective. When it comes to the inevitable arrival of price transparency in metals markets you can see the proverbial glass as half empty or as half full. We (and a growing number of other industry leaders) view it in a far more positive light. It’s simple really — when it comes to consumer demand for transparency, the choice is  pretty clear — get on the train or get run over by it. As former Chief of Staff of the U. S. Army, General Eric Shinseki, put it less delicately:  “If you don’t like change, you’ll like irrelevance even less.”

It’s natural to view any change to the status quo as potentially threatening but that most basic of human instincts — to fear something new — can often prevent you from seeing the opportunities that change brings. This, the first of a multi-part series on MetalMiner (SM) Benchmark, will attempt to shed light on this crowd-sourced application and show metal buying organizations as well as service centers and producers how this new capability can serve as an enabler creating trust between buyers and sellers, accentuating often overlooked value added capability, quality and on time delivery.  It also reduces uncertainty, speculation, and risk for all parties.

First, let’s set aside emotion and take a look at the facts — what has price transparency really meant in other industries? Let’s begin with the problem because most new solutions and innovations come from addressing an actual problem. In this case, the number one problem we hear from our audience always involves a version of “where can I get the price of (fill in the blank)?” And that “fill in the blank” typically covers aluminum, steel, stainless steel, copper, tinplate and GOES (grain-oriented electrical steel). In our world, if a customer wants something, figuring out how to give it to them is a good thing.

We’d argue that buying organizations constantly want to know:

  • the price of the specific metal they are buying (form/alloy/grade/thickness)
  • the forecast for that specific metal they are buying
  • the historical price for that specific metal they are buying
  • what other people are paying for that specific metal they are buying
  • what the drivers are for the specific metals that they are buying

In that same presentation by Denny Oates, he argues wisely (below) the different strategies industry players, both mills and service centers will have to take in order to succeed.

Benchmarking

The role of the “trusted advisor” appears prescient, except that we’d argue that being transparent with customers on what constitutes a “fair and reasonable market price” is something service centers need to embrace not fear. Trust between supplier and buyer is the currency of business in the new, high information, digital world in which we live. A case in point: An Accenture study of B2B sales suggests that 94% of B2B buyers say they conduct some form of online research before purchasing a business product. For large corporate purchases of more than $5,000, 34% spend over three hours researching products. Metals price benchmarking does not change buyer behavior, it simply makes it easier.  What’s interesting, though, is what happens when sellers embrace transparency and use it to endear customers to them.   Read more

It could be argued that Donald Trump’s arrival in the White House has come at the perfect time for the U.S.A.’s number two defense contractor, Boeing. If for no other reason than his assault during the election on the cost of Lockheed Martin’s F-35 program created an opening for Boeing to put a lower-cost alternative back on the table.

Lockheed Martin’s F-35C won’t be ready in time, enter Boeing and an F/A-18 Super Hornet upgrade. Source: Adobe Stock/Spacekris.

At the same time, the U.S. military, particularly the Navy, are facing a bit of a problem with their older F/A–18 Super Hornets. As an article in Sea Power magazine notes, after 16 years of nearly constant combat in Afghanistan, Iraq and Syria the F/A–18 Super Hornet is in danger of exceeding it’s 6,000 hours of operational life way before it had been expected in the next decade.

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

Meanwhile, the Navy variant of the F-35, the F-35C is still a long way from being finished and ready for service. Largely because of the compromises Lockheed Martin has had to incorporate into the F-35 program for the Marine Corps’ F-35B vertical-landing jet, the program is way over budget, running late and, still, according to Bloomberg has major operational capability shortcomings to overcome. Read more

Back in 2014, MetalMiner posted a series of articles under the collective title of “Car Wars” covering a number of related issues around the use of steel, aluminum, and composite materials in the construction of automobiles.

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

A particularly perceptive post by my colleague Lisa Reisman countered the belief that aluminum would be the material of the future for automobile construction by exploring the development of advanced high-strength steels (AHSS) and their emerging impact on the combined holy grail of weight reduction and greater structural strength.

Three years is a long time in automobile design and manufacturing, so it’s not before time that we have returned to the topic to review the extent to which AHSS grades have been adopted by the industry. I was fortunate in gaining the insight of Dr. Jody Hall, automotive vice president of the Steel Market Development Institute (SMDI) during which Hall shared some of the latest statistics illustrating the extent to which, aided by relentless innovation and research, steel remains the material of choice for automotive construction.

Auto materials through the years

Source: SMDI

This chart, from a recent SMDI presentation illustrates how even by the industry’s optimistic projections back in 2010 the uptake of these new grades of high-strength steel have been even more rapid than anticipated.

Why Aluminum?

Although there are a host of reasons why an automotive designer may choose AHSS over aluminum, the two principal drivers have been safety and light-waiting. Read more

Unlike the U.S., which has retained a paper $1 bill, the U.K. did away with the venerable pound sterling banknote in 1983, replacing it with a round dual-metal, £1 coin much to the disgust of traditionalists.

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

Broadly speaking though, the £1 coin has been relatively successful in terms of longevity compared to the paper note. The former has lasted 40 years but the latter about nine months, but at a cost, the British one pound (£) coin has suffered from high levels of counterfeiting.

One pound coin

The new £1 coin, now with security features! Source: the Royal Mint.

There are thought to be more than 30 million fake £1 coins in circulation, adding up to 2.55% of coins according to a recent article in The Sun newspaper. The current pound coin is made up of 70% copper, 24.5% zinc and 5.5% nickel — weighing a mere 9.5 grams. The coin also has a diameter of 22.5 mm (7/8 inch) and a thickness of 3.15 mm (1/8 inch). The new pound coin is also constructed from two different colored metals like the old one, but the new version contains an iSIS security feature (a new high-security coinage currency system developed by The Royal Mint). Read more

The Organization of Petroleum Exporting Countries in general, and Saudi Arabia in particular, have done the U.S. oil industry a massive favor, and they are probably ruing the day they tried to squeeze America’s shale industry out of existence.

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

The collapse in oil prices that ensued after Saudi Arabia-led OPEC opened the spigots two years ago forced American companies, and their many subcontractors, to innovate in a way that would never have happened so fast or gone so far without the imminent threat of survival forcing the pace.

Oil Prices Allow Reopening of Old Wells

Now, U.S. shale producers have achieved economies of scale that allow them to return to previously closed wells in fields like Eagle Ford and achieve 30% returns even at $40 a barrel. U.S. explorers may be making hay in the domestic market, but huge potential exists for these same firms to take their technology abroad. Read more

For off-road cognoscenti, there are few automobiles more iconic than Jaguar Land Rover’s Defender. Since its introduction in 1948, the rugged old workhorse has earned a reputation for go anywhere capability and durability as an article in the FT notes.

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

The Defender’s engineering simplicity meant that the car could be repaired in the middle of the desert with the sparsest of resources and spare parts. But that rugged simplicity also led to its downfall. The SUV’s body-on-frame construction meant that it failed to meet modern safety crash tests and the engine just polluted the air too much to meet European emission rules. JLR consequently halted Defender production last year to the anguish of its diehard fans.

Land Rover Defender. Source: Autoexpress

Well, it would seem JLR has aspirations for a comeback. According to the FT, the group expect to relaunch the Defender in 2019 and its design group is working furiously to reconcept a new vehicle that meets modern environmental and safety standards, requiring a complete redesign from the ground up of the old Defender.

Aluminum Everywhere

It would be inconceivable if the new Defender was less capable than the old, a betrayal of that once iconic brand and, by all accounts, JLR has no intention of letting them down. Like the old Defender, a new version will employ considerable use of aluminum in the body, but unlike the old steel chassis will have an entirely new aluminum frame construction. Read more

More and more Indian companies, including steelmakers such as Tata and Essar Steel, are entering the defense manufacturing sector. Essar Steel, for example, recently announced a game plan to develop steel grades for land and naval defense applications.

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

Essar Steel made a low key entry into the sector about five years ago, but it’s now turned bullish on defense because of the increased marketability of its products. Essar’s products include an indigenous armor plate for ballistic protection. Some of its products are innovative while others are simple substitutes for imports for India’s native contractors looking to keep more of their supply chains close to home. The latter have been used in the construction of naval destroyers, offshore patrol vessels and floating docks. Other products are used in the construction of Coast Guard vessels, so also the repair of naval ships.

In land defense, Essar Steel’s products are used in battle tanks, the motor casings of missiles, combat vehicles, and artillery guns. Read more

Those not involved in the steel industry tend to look at large, integrated blast furnace steel plants as dated technology light-years from the gleaming glass and concrete operations of IT or electronics. However, steelmakers are constantly striving for technological improvements.

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

In fact, the very marginal nature of steel production in the western world means that constant innovation is a necessity for a firm’s survival. Comparisons between U.S. Steel and Nucor Corp. illustrate this point. When U.S. Steel was focused on cost reduction and rationalization at the turn of the century, Nucor was innovating and investing not just in alternative electric arc furnaces, but in direct casting and other downstream technologies. As a result, Nucor is now North America’s most successful steel company but they’re not alone in looking to technology for their future prosperity.

Continuous Casting

An interesting article in the Economist details efforts at a number of steel producers around the world to find a better alternative to the traditional blast furnace. The slab casting and re-rolling route is epitomized by the likes of U.S. Steel and the major Asian steel mills. For years, the only real challenger to this process was the electric arc furnace which enjoys the benefits of scrap as a raw material and greater flexibility and economies of scale allowing it to operate profitably on a fraction of the cost required throughout for a traditional blast furnace-based integrated steel plant.

Liquid steel.

Innovation in steelmaking is coming from novel uses of liquid metal. Source: Adobe Stock/Photollug.

One of the major attractions most EAF plants have is that they produce final product by the continuous casting route. The liquid metal is taken from the refining vessel and, for flat-rolled products, continuously cast into 80-120-mm thick slabs, which can then be further rolled to thinner gauges. Read more

I know it sounds a bit geeky, but we at MetalMiner love to hear about new applications for aluminum. This latest development is not exactly going to change the global demand-supply balance for aluminum but it does showcase one of the many qualities the metal possesses, one which is sometimes overshadowed by aluminum’s lightweight or easy formability.

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

Aluminum’s use in batteries is nothing new. Aluminum–air batteries have been a topic of research for some time and work by producing electricity from the reaction of oxygen in the air with aluminum. They have one of the highest energy densities of all batteries, but they are not widely used because of problems with high anode cost and by-product removal when using traditional electrolytes. Read more

The serial entrepreneur is never shy of making bold claims, and recently he announced plans for Space X to fly two private citizens on a mission around the moon by late 2018.

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

The journey would take about a week and the astronauts will travel deeper into space than any human has ventured before, the Washington Post reports. Let’s think about this. Space X has never flown people before and in the last two years has had two rockets blow up on the launch pad or in flight. Even more challenging is that the mission would require the untested Falcon Heavy Rocket which has yet to fly and a modified Dragon Capsule which is also, as yet, untested in space.

So far Musk’s Space X has operated unmanned missions in a long-running partnership with NASA, to fly cargo to the International Space Station. The program to run manned missions has been delayed but the company still claims it will happen by the middle of next year.

Most, therefore, expect the end 2018 deadline for the lunar mission to be delayed but SpaceX has earned itself a reputation for setting and mostly achieving ambitious targets. It was the first private company to fly to the ISS and the first ever to land the first stage of a rocket that had lifted its payload into orbit. Along with Boeing, Space X has worked closely with NASA to develop reusable launch systems that not only service the space station but could ultimately go to Mars. Maybe spurred by this pace, the private sector is setting the agenda for space exploration. NASA recently announced that it is considering adding astronauts to the first flight of its Space Launch System rocket and Orion crew capsule the Post reports.

Interestingly, the change of administration in the White House has also had an impact on space exploration. Bob Richards, the chief executive of Moon Express, a private company that plans to land a robotic spacecraft on the moon this year is quoted as saying “With the new administration, regardless of what you think politically, comes a new sense of commercial partnerships which is good for us in the space industry. I feel, as many do, a lunar tide rising. The political environment is catching up with logic. With the moon as an important step for even deeper space exploration.”

As the Trump administration looks for a big win in space exploration, somewhat like Kennedy’s promise to send a man to the moon over 50 years ago, there is a new willingness to commit dollars. Some, particularly outside the U.S., look back on that decade in the 1960’s as America’s greatest hour, when the country achieved something no one else dared or could develop the technology to do.

Two-Month Trial: Metal Buying Outlook

Not just for that generation, but in the years that followed it was an inspirational program that developed technologies and advanced science for decades to follow. Maybe it is with one eye on history and a fondness for private enterprise that the new administration is looking at the private sector to again take America to new goals. One man who does not lack the ambition to fulfill such ambition is Elon Musk. We should applaud it.