Equipment and technology firm adds plastic extrusion monitoring capabilities.
Pawcatuck, Connecticut-based Davis-Standard LLC says it is adding to the extrusion technology capabilities at its Technical Center in that city via two equipment additions in the first quarter of 2019. The company says it will offer trials for its Davis-Standard Helibar groove feed extruder and its DS Activ-Check control system for continuous extruder monitoring.
“These technologies have been proven in the field, and we’re pleased to offer experimentation in our technical center,” says John Christiano, the company’s vice president of extrusion technology. He says both additions create new opportunities for customers to improve and strengthen their plastic extrusion processes.
“We are firm believers in partnering with customers to make processes better and in maximizing their capital investments,” says Christiano. “I am eager for customers to use both the Helibar and Activ-Check in establishing performance baselines during real-world trials.”
Davis-Standard describes the Helibar extruder as the next generation in its groove feed extruder line. Helibar technology has been shown to increase extruder output rates while improving energy efficiency and reducing barrel and screw wear, says the company. Other advantages include lower startup costs, shorter residence time and the ability to process higher levels of regrind.
The DS Activ-Check system uses a continuous monitoring platform designed to strengthen preventive and predictive maintenance in extruder operation. With the technology, operators are able to monitor key mechanical and electrical components of the extruder and gearbox and receive early notification of potential component failure to prevent unscheduled downtime, according to Davis-Standard.
“The capability to monitor extrusion line variables such as mechanical and electrical system conditions is essential in order to bring products to market faster,” says John Clemens, Davis-Standard’s director of extrusion controls.
Davis-Standard describes itself as focusing on the design, development and distribution of extrusion and converting technology for customers in the agriculture, automotive, construction, health care, energy, electronics, retail and food and beverage packaging sectors. The firm has more than 1,350 employees worldwide, with manufacturing and technical facilities in the United States, Canada, China, Germany, Finland, Switzerland and the United Kingdom.
Executive order designed to strengthen “buy American” aspects of highway, other projects.
President Donald Trump issued an executive order Jan. 31 titled the “Executive Order on Strengthening Buy-American Preferences for Infrastructure Projects.” The text of the new order refers to an April 2017 executive order designed for the same purpose.
The new executive order includes a definition of materials that will apply that states in part, “’Manufactured products’ means items and construction materials composed in whole or in part of nonferrous metals such as aluminum; plastics and polymer-based products such as polyvinyl chloride pipe; aggregates such as concrete; glass, including optical fiber; and lumber.”
Additionally, regarding steel, “'Produced in the United States’ means, for iron and steel products, that all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.”
The president also defines purchasing cases that involve “Federal financial assistance” as those “consistent with the definition provided by the Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, found at section 200.40 of title 2, Code of Federal Regulations.”
The order defines the term “infrastructure project” to mean “a project to develop public or private physical assets that are designed to provide or support services to the general public in the following sectors: surface transportation, including roadways, bridges, railroads and transit; aviation; ports, including navigational channels; water resources projects; energy production, generation and storage, including from fossil-fuels, renewable, nuclear and hydroelectric sources; electricity transmission; gas, oil and propane storage and transmission; electric, oil, natural gas and propane distribution systems; broadband internet; pipelines; stormwater and sewer infrastructure; drinking water infrastructure; cybersecurity; and any other sector designated through a notice published in the Federal Register by the Federal Permitting Improvement Steering Council.”
In terms of follow-up to the order, President Trump writes, “Within 120 days of the date of this order, the head of each agency administering a covered program shall identify in a report to the president, through the assistant to the president for trade and manufacturing policy, any tools, techniques, terms, or conditions that have been used or could be used, consistent with law and in furtherance of the policy set forth in section 1 of this order, to maximize the use of iron and aluminum as well as steel, cement, and other manufactured products produced in the United States in contracts, subcontracts, purchase orders or subawards that are chargeable against federal financial assistance awards for infrastructure projects.”
Mike Southwood of CRU considers a potential looming zorba glut in light of changes to China’s scrap import policies.
As 2018 came to an end in the United States aluminum scrap market, plenty of mill and secondary grade scrap units were available to go around, while demand for these units was weak and spreads continued to be very wide. Mills continued to be adequately stocked, with no need to purchase additional scrap units, and demand for secondary scrap was light as secondary smelters worked down existing inventories before the end of the year.
Changes to China’s scrap import policies in the second half of this year will likely further affect the U.S. aluminum scrap market.
In early 2019, the market has picked up where 2018 left off—slow demand because mills and secondary producers have adequate scrap on hand, an ample supply of scrap at the yards and very wide spreads. For example, the spread between P1020 and mill grade segregated scrap prices in January 2019 was around 23 cents per pound, the same as it was in late 2018, and two-cents-per-pound wider than January 2018.
As of mid-January, scrap supply was not an issue in the market, as winter weather had yet to impact peddler traffic to the yards; shredders were still generating zorba and twitch; and industrial scrap continued to be generated at strong levels. However, the severe winter storms and extreme cold temperatures experienced in late-January in the Midwest likely will affect load deliveries and peddler inflow and will cause a slowdown in shredding activity. While this will curb scrap generation for a short time, it will not cause the scrap surplus to shrink significantly as such dynamics would need to be more than a short-term event to change the current oversupply situation.
As the early weeks of 2019 progress, mills and secondary producers are expected to come back to replenish scrap supplies that were worked down at the end of the year. On the mill grade side, demand isn’t likely to resume right away in 2019. With high scrap inventory at mills, they have no pressure to buy with wide spreads and ample availability. In fact, CRU understands that new deliveries are not being booked until the second quarter and that some orders from November/December 2018 have not been scheduled for delivery yet. This will likely support continued wide spreads.
In addition, with a surplus of obsolete scrap units available in the market at wide spreads, secondary smelters are not moving up the food chain to obtain higher grades of scrap, removing what would be a source of additional demand for mill-grade units. However, for secondary grades, demand has started to come back slowly at the start of the year as secondary smelters look to replenish inventories at low prices, and automotive manufacturers, die casters and original equipment manufacturers (OEMs) come back after end-of-year slowdowns.
Like most of 2018, as of the start of 2019, there is just very little demand outside of contractual shipments, and with scrap continuing to be generated, it remains plentiful in supply. We understand that some mills have booked less scrap volumes on contract for 2019, as they look to take advantage of lower spot prices. This has surprised some scrap dealers, who had anticipated mills to fully contract and take advantage of historically wide scrap spreads.
A potential scenario exists that when current inventories are depleted and mills enter the market for scrap units later in the year, a shift could occur from a buyers’ market to a sellers’ market.
A drastic change to U.S. scrap market dynamics has come in the form of an announcement from the Chinese government that as of July 1, 2019, scrap items under HS code 7602000090 are being moved from the list of raw materials that can be imported into the country without restrictions to the list of solid waste items for which imports are restricted. To give a sense of the impact, in 2018, China imported more than 2 million tons of aluminum scrap from all trade partners under the HS code 7602, 99 percent of which would now fall under the restricted list.
The particular customs code in question (HS code 7602000090) includes “Category 6” scrap items. Category 6 aluminum scrap includes twitch/zorba material, which makes up a vast majority of aluminum scrap that the U.S. exports to China. According to current regulation for restricted imports, the importers will need to apply for a license to bring in these products.
The impact on the U.S. scrap market will be huge. Imports of aluminum scrap from the U.S. to China already are subject to a 50 percent import duty, which has greatly reduced volumes going to China from the U.S. According to the latest trade data, exports from the U.S. to China were down by nearly 40 percent through October 2018.
With the move of Category 6 scrap to the restricted list, on top of the existing 50 percent import duty, the writing seems to be on the wall. Unless policy changes are implemented between now and July 1, U.S. exports of such aluminum scrap grades to China will effectively end.
In addition, the 50 percent import duty on U.S. aluminum scrap into China likely will hinder any potential efforts by importers/exporters to ship large volumes to China during the first half of the year in advance of this deadline. If exports to China effectively end at the beginning of the second half of 2019, the current U.S. scrap glut would become larger, unless alternative destinations are identified.
In response to lower demand from China and the 50 percent import duty, U.S. exporters were successful in finding alternate homes for their units in 2018. As a result, total U.S. exports of aluminum scrap actually rose in 2018, as gains in exports to other countries, such as India and Malaysia, outweighed the large decline in exports to China. However, CRU questions the ability of these markets to sustain such levels of imports. Even if these alternate homes could sustain 2018 levels, it is highly unlikely that they could absorb the full weight of volume loss that would occur if U.S. exports to China ceased in the second half of 2019. As well, this would not be able to replace the amount of aluminum scrap that goes to China on an annual basis.
Without permanent long-term new homes to go to, this material that once went to China will stay in the domestic U.S. market. As the zorba that typically goes to China is not a product that is used in the U.S., it needs to undergo further processing to turn it into a twitch package that can be sold here. This could lead to an increase in capital spending to expand or enhance separation equipment at scrap processors.
Zorba generation is traditionally tied to shredding operations, which are driven by steel prices. U.S. steel prices had a good run in 2018, which incentivized shredding, thereby generating more zorba. This resulted in a glut of material in the U.S. market last year.
With scrap export volumes set to drop this year, this situation could become worse because even if more zorba is processed into twitch, the homes for twitch are limited. More zorba and twitch could pile up if shredding continues at the 2018 pace.
However, steel scrap prices have been weaker in 2019, which likely will have a negative impact on the amount of shredding that occurs. If so, this may be the lone factor that can pull in the reins on growing zorba and twitch supplies.
Mike Southwood is senior analyst, aluminum, for London-based CRU. He is based out of the company’s Pittsburgh-area office and can be contacted at mike.southwood@crugroup.com. More information on CRU is available at www.crugroup.com.
Steelmaker also forecasts comfortable margins for the first quarter of 2019.
Pittsburgh-based United States Steel Corp. has reported full-year adjusted 2018 net earnings of $957 million, up 147 percent from full-year 2017 net earnings of $387 million. The company’s net sales for 2018 of nearly $14.18 billion represents a 15.7 percent increase from 2017 sales of $12.25 billion.
“We are pleased with both the strong earnings we reported in 2018 and the important progress we made on our strategic objectives,” says David B. Burritt, U. S. Steel’s president and CEO. “We are encouraged by the effectiveness of the investments we are making and remain focused on improving our operating and commercial performance to drive long-term value creation for our stockholders."
The company says it expects first quarter 2019 adjusted EBITDA (earnings before interest, tax, depreciation and amortization) to be approximately $225 million, but that excludes any impacts of from a Dec. 24, 2018, fire at the company’s Clairton, Pennsylvania, coke making facility.
First quarter 2019 EBITDA for the company’s Europe segment is expected to be down from the first quarter of 2018 because of lower volumes, higher raw materials costs and an unfavorable change in the U.S. dollar-to-euro exchange rate.
U.S. Steel operates integrated steel mills in Alabama, Illinois, Indiana, Michigan and Pennsylvania in the United States and in Slovakia in Europe.
Roland Harings will succeed Jürgen Schachler at German copper firm in July.
The supervisory board of Hamburg, Germany-based copper producer Aurubis AG has appointed 55-year-old Roland Harings as the next CEO of the Aurubis Group. Harings will directly succeed current CEO Jürgen Schachler, 64, to assume his new position on July 1, 2019.
Harings has been the CEO of MKM Mansfelder Kupfer und Messing GmbH since 2014. MKM makes semi-finished products made from copper and copper alloys and employs about 1,200 people. Prior to that, Harings headed the European automotive supply business of Novelis Inc. while also serving as a vice president of the Atlanta-based aluminum firm, where he oversaw the expansion of the automotive division in China and the USA.
“With Harings, Aurubis has gained an exceptionally successful manager with over 25 years of international experience in the raw materials industry – aluminum, copper, and brass,” states Aurubis Supervisory Board Chairman Prof. Dr. Fritz Vahrenholt. “Because of his knowledge of the metals industry, with its challenges and opportunities for the future, and his compelling personality, Harings has the right profile to purposefully continue Aurubis’ strategic development into a multi-metal company and to successfully implement it on an operational level.”
Says Roland, “I look forward to this new, high-responsibility position at this exciting time of realignment for Aurubis, which holds a great deal of potential. I’m very familiar with the company, not only from a customer perspective, and I hope to make a committed contribution – together with my future Executive Board colleagues – to successfully positioning Aurubis for the demands of the years to come.”
Aurubis AG produces nonferrous metals and bills itself as the world's largest copper recycler. The company consumes scrap metals and metal concentrates in the production of more than 1 million metric tons annually of copper cathodes, wire rod, rolled products, strips and profiles made of copper and copper alloys. The company also refines or produces precious metals, selenium, lead, nickel and other products at production sites in Europe and the United States.