SW North America, CNC Machines and Automation
Published

Material Impacts On The Precision Machining Industry - October 2008

In this edition of Material Impacts we learn that the October price increase for steel appears to be dead due to lethargic manufacturing conditions. Only Aluminum, Steel and Coke are higher compared to the same month last year, September 2007; other items we track have fallen substantially. Aluminum is up 3.9% since January; down 17% since July. Brass Scrap is up 0 .6% since January; down 14.8% since last report in July. Copper Cathode is up 3.4% for year; down 15.9% since July. Scrap Nickel is down 21% since January; down 8% since July. Steel #1 Busheling is up 105% since January; down 4 % since July. (Actually, using October numbers, this commodity is up 37.3% over January and down 35.9%from July.) China Coke is up 58% since January; down 49.9% since July. To paraphrase the announcer on the car commercial: "Your pricing may vary. Always buy responsibly. Always buckle up." See links below for the latest Material Pricing information and China Currency publication.

Share

Drop in Demand, ‘Stealth Production Cuts’And Yet, Some Prices Remain Stubbornly High

“Manufacturing had avoided much of the decline that we’d seen brought on by the financial services sector,” “The economic environment remains volatile.” “The world is engulfed in a massive crisis of confidence in financial institutions”

Among the “Financial Rescue” funds passed last Friday, we find $162 million in tax incentives for recyclers and $25 billion in ‘Bailout money’ for the Big 3Automakers in Detroit http://tinyurl.com/44p4me. We don’t seem to recall such government largesse when it was the steel industry forced into the fire by the markets… Nor when the small manufacturers first faced the onslaught of cheap Asian imports. No comments yet on where the lipstick is on this pile of pork! Time will tell if these funds are targeted specifically to just these specific industries, or, for example, if recycling equipment in our shops will also receive favorable tax treatment.

Quick Summary: Only Aluminum, Steel and Coke are higher compared to same month last year, September 2007; other items we track have fallen substantially. Aluminum is up 3.9% since January; down 17% since July. Brass Scrap is up 0 .6% since January; down 14.8% since last report in July. Copper Cathode is up 3.4% for year; down 15.9% since July. Scrap Nickel is down 21% since January; down 8% since July. Steel #1 Busheling is up 105% since January; down 4 % since July. (Actually, using October numbers, this commodity is up 37.3% over January and down 35.9%from July.) China Coke is up 58% since January; down 49.9% since July.

Coke in China is anticipated to slide moderately over the remainder of 2008 due to decreasing demand from downstream steel producers” according to a report from Interfax-China. Producers in ShangXi province have cut prices by 100 yuan (~$14.60) per ton. Weak demand, increase in export tariff were cited for the cut.

The benchmark commodity that we follow, #1 Steel Bundles, Chicago, is no longer tracked due to changes in the way the automakers sell their stamping scrap. Effective with June 2008 data, we are reporting the AMM #1 Busheling, composite price (Chicago, Cleveland, and Pittsburgh) as our indicator for price of steel scrap. It has tracked essentially the same as #1 bundles over the last two years.

At the time of preparation of this report, #1 Busheling had already fallen over 33 % from the price we reported for July in our last report ($890 long ton). Republic Engineered Products had announced a $2.50 per cwt, $50 per ton price increase on all Wire and Cold Finished Bar products. The North American price of steel continues to be driven by global events including Coke production cutbacks in China, iron ore pricing in Australia and Brazil, and scrap buys by steelmakers in the Middle East.

Please see the Analysis of Foreign Currencies prepared by Georgetown Economic Services posted along with this report.

Read the complete Material Impacts Report (PDF format): Material Impacts On The Precision Machining Industry - October 2008.

SW North America, CNC Machines and Automation
Techspex
SPC Innovations, In-machine gaging and attachments
SolidCAM
Kyocera
manufacturer of machine tools
Efficient, Durability, Advanced CBN Abrasives
Horn USA

Read Next

Material Impacts On The Precision Machining Industry - August 2008

Are you enjoying the Olympics? I hope so, because the effects of China’s efforts to clear the air for them have certainly had a measureable effect on the prices for our raw materials here in North America. “According to analysts, China has cut met coke output by 72% to avoid adding more polluting gases to the environment.” China Coke (metallurgical coke is used to refine iron ore to make steel) has increased in price by 215% since January. Steel Scrap is up 114% since January. Get the facts behind the materials impacting your business in the August PMPA Material Impacts Report.

Read More

Material Impacts On The Precision Machining Industry - June 2008

As of June 2008, steel is up 109%, coke is up 105%, aluminum, copper, brass and oil are at record highs. Nickel and stainless show some softening of price. Five of the seven items we track are up over the same month last year. Lead times are extending as inventories are lean and who wants to build inventory in a volatile market? So focusing on understanding what your suppliers can do for you may be the key to your improved performance in the months ahead.

Read More

A Tooling Workshop Worth a Visit

Marubeni Citizen-Cincom’s tooling and accessory workshop offers a chance to learn more about ancillary devices that can boost machining efficiency and capability.

Read More
SW North America, CNC Machines and Automation