“After 125 years, Alcoa looks beyond aluminum” – ETAuto.com, 29 June 2014

Alcoa was established in the US in 1888, and since then has become the third largest producer of aluminum in the world. The company has become a primary manufacturer for aerospace and automotive parts, recently striking a deal with jet engine parts manufacturer Firth Rixson to create parts that use nickel, titanium, and aluminum-lithium alloys, rather than primary aluminum. Alcoa’s diversification is the company’s attempt at dodging the current primary aluminum market, which is struggling with weak demand and overcapacity.

via Wall Street Journal

via Wall Street Journal

The company is slowly rebranding itself as a manufacturer of various lightweight metals. This past May, Alcoa opened a $100 million facility in Indiana that will manufacture nickel-based alloy engine parts. Alcoa is slated to invest $25 million in a Virginia-based facility that will also mostly generate nickel-based alloy jet engine blades. Alcoa’s expansion has helped their stock grow over 80 percent since last year.

Aluminum will never leave Alcoa, and its use is only becoming more important in the US. Obama’s 2010 mandate to double new-car average fuel economies by 2025 has forced large US car manufacturers, like GM and Ford, to opt for aluminum rather than steel. In the past, aluminum has been used in manufacturing wheels, engines, and hoods of cars, but now the US car industry is moving to all-aluminum bodied cars.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

July 2, 2014

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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“Turkey’s Crisis Dents American Steel” – Wall Street Journal, 5 February 2014

Turkey is the world’s biggest scrap steel importer and a key consumer in the $20 billion US steel scrap industry. But Turkey’s current economic crisis is taking its toll on the US scrap steel industry, the country’s weak demand and declining currency making imports very costly.

The US is the number one exporter of iron and steel scrap, selling $10 billion per year, more than two times the amount Japan sells, second to the US. Turkey has been the number one importer of US scrap since 2008; the country’s steelmaking companies mainly use electric-arc furnaces to melt down the scrap imports. Turkey, in turn, sells to Iraq, Saudi Arabia and the United Arab Emirates, becoming the largest exporter to these countries.

In the first 11 months of 2013, Turkey’s imports dropped 18% to 4.9 million tons, a huge hit to the US scrap steel industry. Turkey is now importing more steel from Europe, and manufacturing steel products from semi-finished steel items purchased from Russia, instead of manufacturing steel from scrap.

East Coast scrap traders are more widely affected by Turkey’s decline, whereas West Coast traders chiefly export to Asia. While demand from Asian countries, such as China, is predicted to continue growing, there is a worry that the demand could dwindle as China has its first “scrap cycle,” a phrase applied to a young, industrialized country that begins producing its own scrap with recycled steel goods. China will remain an importer for now, but the question remains whether China, like the US, will also become a global exporter of steel scrap. The US steel scrap industry has a lot to lose.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

February 24, 2014

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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