Jim Olsztynski 2013-11-12 01:41:06
Are We At the Dawn of a New Bronze Age? Historians of ancient culture label the Bronze Age, when humans first started mining and smelting copper and tin, as a key period in human civilization. Could the discovery of a new material herald a similar turning point? In September’s edition of ASA Materials Market Digest, this editor wonders if historians of the distant future might look back at experiments done recently at Argonne National Laboratory in the same light as the Bronze Age. When working with zinc cyanide, a material used in electroplating, scientists applied extreme pressure and ended up with a new kind of material that seems to defy the laws of physics. Why? Because zinc cyanide expands rather than contracts under high pressure. The outcome of this discovery is important because of the potential applications of this material, which include use as water filters, chemical sensors, and compressible storage for carbon dioxide sequestration of hydrogen fuel cells. Read more about this discovery online by visiting Science Daily. Carbon Steel U. S. service center steel shipments in July 2013, increased by 5.3 percent from July 2012, reversing a pattern of monthly declines. Steel product inventories decreased 1.3 percent from the previous month. Shipments from U.S. steel mills dropped 3 percent in June from the previous month and 2.6 percent compared with June 2012, reported the American Iron and Steel Institute. Shipments year-to-date in 2013 were down 5.4 percent vs. 2012 shipments for six months. International steel prices reached a 41-month low in July, reported MEPS, although low inventories and tight availability were beginning to stem the tide of price declines in recent weeks. “However, the upturn in global selling figures is likely to be short-lived. Demand in Western nations traditionally softens in the fourth quarter. Consequently, prices are predicted to turn down, albeit only modestly, before the end of 2013,” MEPS commented. MEPS’ annual average Global All Products Composite steel price is predicted to increase approximately 4 percent in 2014, ending two years of consecutive declines. Stainless Steel The monthly wish of price increases by major U.S. stainless producers continues as all of the major domestic producers — ATI, NAS, AK Steel and Outokumpu Stainless USA — announced increases of up to 2.6 percent in stainless steel surcharges for September on most grades. Also, ATI announced increases in base selling prices on three 400-grade products effective October 1. Every month, the big four try to enact increases, but in recent times, the market has always shot them down. It remains to be seen whether these new prices will stick. If the nickel market is any guide, stainless prices will remain subdued. As of August 30, nickel’s spot Price on the LME was hovering around $6.23/lb., about where it stood at the beginning of the month following an upsurge to $6.68/lb. at mid-month. MEPS predicts stainless prices to rise in North America, starting in September. “Reduced discounts on the mills’ list prices will combine with a steady rise in alloy surcharges, in the coming months, to achieve peak transaction figures around May of next year,” according to a MEPS analysis. “Prices will then subside as the summer holiday season approaches.” China’s refined nickel imports jumped 21.9 percent in June to the highest level since January, AMM reported. The country’s shipments of nickel ores also reach a year-to-date high in gaining 9.8 percent from the previous month. MEPS’ world average price for grade 304 cold-rolled stainless steel coil is around 12 percent lower than at this time last year. “In most of the world’s major stainless steel markets, demand has remained below pre-crisis levels and oversupply persists,” said MEPS. Nonetheless, they forecast a new record global crude stainless steel output of 36.4 million tons for the calendar year 2013. The average prices of all of the three main alloying metals — nickel, chromium and molybdenum — are forecast to be lower over the next 12 months than they have been during the last year. Tubular Products Oversupply caused distributor selling prices for OCTG to drop in August to the lowest level since February, 2010, according to figures from Tulsa’s Pipe Logix, Inc. The firm pegged the average OCTG price at $1,655 per ton last month, down 0.2 percent from July and 10.6 percent below the $1,851 reached in August last year. Seamless product prices fell 0.1 percent to $1,796 per ton and welded products dropped 0.2 percent to $1,514 per ton — the 17th consecutive monthly decrease for welded OCTG. Imports are still being blamed for crippling OCTG pricing, despite an investigation by the U.S. International Trade Commission (ITC) against China and other nations. On August 16, the ITC determined by unanimous vote that there is a reasonable indication that the U.S. oil country tubular goods (OCTG) industry is being materially injured by imports from India, the Philippines, Saudi Arabia, South Korea, Taiwan, Thailand, Turkey, Ukraine and Vietnam. The agency charged firms from those countries with “significant underselling.” ITC studies found that the imported products undersold domestic product in 153 of 192 possible comparisons by an average of 9.5 percent and as high as 45 percent. The ITC also found that imports from the nine countries increased market share over the period of investigation to 25.3 percent in 2012 from 17 percent in 2010. Despite the glut of OCTG, producers continue to build new plants in the U.S. Germany’s Benteler Steel/ Tube GmbH has broken ground on its $900-million OCTG mill in Louisiana. The facility is expected to be operational by 2015. Also, Tenaris SA in July received the permits needed to begin construction of its $1.5-billion, 600,000-ton seamless OCTG mill in Bay City, Texas. Then, on August 29, PTC Seamless Tube Corp. announced investing $102 million to establish a 256,000 square foot, seamless OCTG facility in Hopkinsvile, Kentucky. Copper Copper prices increased steadily in August before running into headwinds during the last week of the Month (see chart). The Comex Spot Price hit a two month high of $3.36/lb. on August 18 before starting to decline. Nonetheless, the Comex Spot Price on August 30 ended at $3.23, still a little bit above the $3.16/lb. at which it began the month. Global copper demand seems to be picking up. China’s refined copper imports increased 14.7 percent in June to the highest level since September 2012,While copper ore imports recovered from the previous month’s slump, climbing 65.8 percent from a year earlier to a record-high 938,503 tons. The world’s refined copper market balance turned slightly negative in May, following seven consecutive months of surplus, according to preliminary data released last month from the International Copper Study Group (ICSG). A small production deficit of 17,000 metric Tons (t) was calculated. Chinese apparent refined demand in May was at the highest level since December 2011, and usage in the United States was at the highest level since March 2012. The refined copper balance for the first five months of 2013, including revisions to data previously presented, indicates a production surplus of 228,000 t (a seasonally adjusted surplus of 372,000 t). This compares with a production deficit of 480,000 t (a seasonally adjusted deficit of 344,000 t) in the same period of 2012. In the first five months of 2013, world usage is estimated to have declined by around 2.0 percent compared with that in the same period of 2012. Scrap Ferrous scrap prices continued in the doldrums through August. The market went mostly sideways, although analysts say year-over-year prices dropped for the second year in a row. Ferrous scrap exports were down 12 percent during the fi rst six months of the year AMM’s Midwest Ferrous Scrap Index for No. 1 busheling settled August 12 at $409.95 per gross ton, down 79 cents from July 10, while the Midwest Ferrous Scrap Index for shred settled at $368.85 per ton, down 3.2 percent from $381.06 in the same comparison. Stainless scrap buying prices dropped in early August before surging a bit in line with improved nickel prices. By month’s end, the market was holding steady with Type 304 solids going for $1,345 to $1,415 per gross ton, according to American Metals Market. Copper scrap was on a downward trend as August drew to a close, in line with LME and Comex prices. AMM reported that as of August 28, refiners’ copper scrap No. 1 prices were around $3.22 to $3.24 per pound. Plastics Polyethylene resin prices held steady through July and into August, despite suppliers’ attempt to push through another 2¢/lb. On HDPE, according to Plastics Technology magazine. All of the major players will make another attempt to impose that hike, along with an additional 5¢ increase, for the first of September. Some industry observers doubt the producers can make the increases stick. PVC resin prices also remained relatively stable, despite suppliers’ attempt at a 2¢/lb. Price hike in August that they were having trouble implementing. Analysts expect prices to remain steady into September, barring hurricane season disruptions or a surge in exports. PVC demand may take a bit of a tumble as the construction season winds down. News of Note The American Supply Association’s (ASA) industrial PVF distributors reversed their previous 4-month sales decline in July, gaining 3.4 percent in sales revenues on average for the month compared with July 2012, according to the association’s most recent Monthly Pulse Report. For the calendar year-to-date through July, average sales were down 2.5 percent but were up slightly by 0. 6 percent on a trailing 12-month basis. The monthly Economic Indicator Report from the Industrial Supply Association increased in July after having decreased the previous month. The ISA Manufacturers Index rose from 55.9 percent in June to 63.5 percent in July, while the Distributor Index increased from 61.2 percent in June to 62.0 percent. For each index, a reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction. MRC Global, Inc. reported 2nd quarter sales of $1.268 billion, a decline of 11 percent from the second quarter of 2012 due, in part, to a planned reduction in the company’s lower margin OCTG business. OCTG represented 9.0 percent of total sales in the second quarter of 2013 compared to 14 percent of total sales in the second quarter of 2012. Net income for the second quarter of 2013 increased 13 percent to $43.9 million. MRC Global, Inc. announced on August 8 that Alan Colonna will assume the role of Executive Vice President — Business Development and U.S. Operations, and Gary Ittner will become Executive Vice President — Supply Chain. Houston’s Merfish Pipe & Supply Co. Has acquired BBL Co., based in Kulpsville, Pennsylvania, now known as Merfish Pipe & Supply. Bob Rau, who was previously president of BBL, is staying with the combined company as a general manager for the northeast region. Collins Pipe & Supply Co., based in East Windsor, Connecticut, has bought Tulsa, Oklahomabased Apex Remington Pipe & Supply Co.’s Marcus Hook, Pennsylvania facility in order to expand into the oil and gas market. Collins Pipe also has facilities in Bangor and Portland, Maine, as well as in Buffalo and Syracuse, New York. Edgen Group reported 2nd quarter sales of $431.6 million, down 13.1 percent from $496.5 million in the second quarter of 2012, but up 6.3 percent from $406.1 million in the first quarter of 2013. It suffered a net loss of -$0.3 million for the 2nd quarter of 2013 as compared to -$13.8 million in the second quarter of 2012 and -$5.4 million in the first quarter of 2013. “We really have had a very difficult market for steel prices in the last 18 months, and quite frankly, we were surprised this year at the continued decrease that we’ve seen,” executive vice president and chief financial officer David Laxton told attendees August 15 at Jefferies & Co. Inc.’s Global Industrial and Aerospace and Defense Conference in New York. Twelve million man hours of labor for pipefitters are expected to be added in the Gulf Coast region from now through 2015, thanks to construction projects tied to the oil and gas industry, according to an estimate by Industrial Info Resources.
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