WCA May 2013

The 3-Series is BMW’s most popular car in the US, dominating the small luxury car market. The company sold nearly 100,000 of them in the US last year.

❖ For the second year in a row, Fortune named Alcoa the most admired metals company in the world. Pittsburgh-based Alcoa, the largest global aluminium producer, has made the “Most Admired” list since the magazine began the annual ranking in 1983. Selection is based on surveys of executives, directors and analysts who rate companies in their own industries. Elsewhere in steel . . . ❖ On 27 th February, AK Steel said its base prices for carbon flat-rolled steel would go up at least $50 per ton for new orders. The West Chester, Ohio-based maker of flat-rolled carbon, stainless, and electrical steels did not give a reason for the increase. But the newsletter Steel Market Update had reported a US Steel rise in base prices for all flat-rolled steel by at least $50 a ton, and AK Steel appeared to follow suit. Analyst Anthony Rizzuto of the investment bank Dahlman Rose & Co told Reuters that it is unusual for US Steel to lead price increases in that way. He said the move should at least keep prices in the broader market from falling in the short term. “The last time US Steel was the first to move was in mid-October, when prices were in free fall,” Mr Rizzuto wrote in a client note. “The move effectively marked the bottom, and list prices moved higher almost immediately.” ❖ On 26 th February it was reported that Usinas Siderurgicas de Minas Gerais SA, which accounts for 28 per cent of total steel output in Brazil, would be raising its steel prices to distributors in March. Usiminas, based in Belo Horizonte, was set to raise prices for some steel products by between six per cent and 12 per cent, Banco Santander SA analysts said in a note to clients. The boost is the second this year for Usiminas, which raised prices to distributors by an average five per cent in January. Also on 26 th February, the US edition of Reuters reported the view of analysts at Bank of America Merrill Lynch that potential price hikes for flat steel products and higher import tariffs could generate momentum for Brazilian steelmakers, but that such developments are generally priced in. “Although this is a clear positive for flat steel players in Brazil, we question the sustainability and think such hikes might not be fully implemented,” the analyst Thiago Lofiego said in a client note.

Steel vs aluminium

As fuel-mileage efficiency targets loom, advanced high-strength steel products will carry the charge against the upstarts Under rules finalised last year, car and light-duty truck fleets in the US will have to meet the corporate average fuel economy standard of 54.5 miles per gallon by the 2025 model year. Speaking on 12 th February at an Association for Iron & Steel Technology (AIST) Midwest chapter meeting, Robert Ives, director of sheet quality assurance at the Gary Works of United States Steel Corp (Pittsburgh), said the industry needs to bring a third generation of advanced high-strength steel products to market to compete with the aluminium sector as the light metal becomes more prominent in automobile production. As reported by Bowdeya Tweh in the Northwest Indiana Times , Mr Ives said that the previous three months of discussions with automakers had encompassed about three years of materials decisions as companies plan what their vehicle fleets will look like in the next three to five years. Advanced high-strength steels occupy a spectrum of products forged and processed to make the steel not only stronger, but also lighter-weight compared to milder steel grades. However, noted Mr Tweh – while steel “isn’t leaving its position as a dominant material in automobile production” – industry representatives and consultants say other materials are growing their market share as steel companies work to develop a new range of products that subtract weight even as they satisfy safety requirements. (“Steel Still Relevant in Auto Production despite Competition,” 16 th February). “We believe that cars will come out with a lot of aluminium in the next generation,” Mr Ives said to more than 350 people at the AIST event in Hobart, Indiana. “That’s something we’re watching very closely.” Consulting firm Ducker Worldwide (Troy, Michigan) in 2012 released a forecast that the average amount of steel in light-duty vehicles by weight in North America would fall 11 percentage points to 46 per cent in 2025. The amount of aluminium would nearly double, to 16 per cent. ❖ Over the same period, advanced high-strength steel product usage is expected to rise from 194 pounds to 375 pounds per vehicle. “That’s a lot of steel,” Dick Schultz, a Pittsburgh-based project consultant at Ducker, told Mr Tweh. “But nobody likes to lose share.” Mr Schultz said smaller vehicles have been able to reach fuel mileage efficiency targets by adopting engine changes; but that automakers are eyeing an increased use of aluminium and other materials including magnesium for trucks.

Technology

How may an award-winning new metal product expect to fare outside of the laboratory? “Metals are among the most heavily researched materials, and inventing a new one that makes a splash in the marketplace is often excruciatingly difficult.”

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Wire & Cable ASIA – May/June 2013

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