SFSA Casteel Reporter – April 2021

Casteel Commentary

China poses challenges for our industry. The challenge is not that they are more efficient, more capable, or lower-cost producers. Structurally, China’s activity has been a critical support to the market prices for energy and raw materials that has supported our industry while they have made uneconomical investments in manufacturing that will lead to problematic dislocations in the medium term. They had a deliberate strategy to over-invest in steel and aluminum production, including castings, to gain a commercial and military advantage in the global system…

Physics of Porosity Fundamentals Webinar, April 28, 8:30-10:30AM CDT

Christoph Beckermann from University of Iowa, whose recent research has led to a new porosity model, will discuss the fundamentals of porosity formation in steel castings in the upcoming member webinar on Wednesday, April 28, 8:30 – 10:30 AM CDT. The webinar will be focused toward modelers and foundry engineers to provide the basics of the physics behind simulation. Through a better understanding of what drives porosity from filling through solidification, modelers will be better able to leverage modeling tools for quicker and more meaningful results. Register here by April 23. Please contact Diana for questions.

Cast in Steel Competition: Thor’s Hammer Premiere to air April 30, 2021

Register Now!

Twenty-Six teams from Twenty universities compete to prevail!

This unmatched student experience is made possible by industry partners and university professors committed to mentoring students as they broaden their understanding of careers in the steel casting industry. A preview of projects is available on the Steel Founders’ LinkedIn page.

Watch these incredible projects compete. Hear from industry experts Ben Abbott, Judge and 2-time Champion on the History Channel’s program Forged in Fire, Phillip Harrison, artist and blacksmith, Penumbra Design Studio, and Scott Lammers, Executive Director, Ductile Iron Society. Find out firsthand which team will take home $500.00 per student for Best Technical Report, Best Project Video, and Best Performance. Will it be your alma mater?

SFSA is ever grateful for program sponsors like General Kinematics, for hosting our competition, Industry Partners like those mentioned below, and countless hours shared by the university professors make the competition possible. You must be registered to receive the event link.

New! Cast in Steel Award: Applications Due, May 1^st

Members, please pass along to your employees.

The Cast in Steel Award provides $5,000 for students struggling to find resources to pursue an education for a career in the steel casting industry. The “Cast in Steel” slogan was first promoted by Steel Founders’ Society of America (SFSA) in 2018 as a way to recognize the unique capability of steel castings and personnel at steel foundries. The slogan represents the pride we take in being part of the steel casting industry.

The Cast in Steel Competition is separate from this award. This Award came from the ‘pay it forward’ idea of several members who struggled to pay for their education. Annual awards will only be granted if qualified applications are received. Eligibility requirements can be found on the application website.

Member Interns: Peaslee & Schumo Scholarships – Due July 6^th

Recruiting students to join our industry and grow into leadership positions remains a critical need in the steel casting industry and a strategic initiative of the Society. The Steel Founders’ Society Foundation aims to attract the next generation workforce by providing scholarships to student interns. To compete for the scholarships, interns are required to work at a member foundry and carry out a specific task or investigation. Selected works are presented at the annual T&O conference. If you currently have or plan to have an intern work at your foundry in 2021, be sure to have them complete this online registration form by July 6. Find out more about the scholarships here.

75th T&O Conference, Dec. 8-11

Fingers crossed, this year we will celebrate in-person the T&O’s Diamond Jubilee with its 75th annual conference. Please mark your calendars for tentative dates of December 8th through the 11th, 2021 with plans to be in Chicago. The T&O Committee started planning the conference in January and will meet at the end of this month. Paper contributions are still welcome – please contact Dave.

To commemorate the diamond anniversary of the Technical and Operating Conference, SFSA will hold a children’s art contest. The winning work may become the face of this year’s conference. With the focus on operations, the artwork should illustrate processes for manufacturing castings or the people who do foundry work, or both. Program details to be released in May, deadline for submissions will be at the end of June.

Research Highlight

The University of Iowa, the University of Alabama at Birmingham, and SFSA have been working with member foundries to capture the local tensile properties of cast components to develop a correlation between process and performance modeling. A pattern was selected to be cast at several member foundries to better understand the variation from facility to facility. Criteria for the pattern selection included having complex geometry with thin and thick sections and for the component to not be customer-specific. We intentionally rigged the casting asymmetrically to have a range of radiographical soundness. The pattern has been cast at three foundries to date with two more planned. The University of Iowa is supporting the project through process and performance modeling primarily using MAGMA, FEA, and Fe-safe, while the University of Alabama at Birmingham is providing material characterization and fracture surface analysis. The University of Iowa has identified that the tensile strength correlates well with chemistry and heat treatment. This supports the theory that casting properties are driven more by the material than by artifacts of the casting process.

Next Generation Manufacturing (NGM)

SFSA has been working with Southwest Research Institute (SwRI) to plan the launch of automated grinding technology at a demonstrator foundry. Two key technology development needs have been discussed with SwRI: intelligent work holding and no part setup/no part programming. To help identify opportunities and partners, SFSA will be presenting on the needs for job shop automation at the annual ROS-I meeting in April. SFSA is working with ISU to expand their smart automation into arc-air and production welding. UAB presented results from their initial project on RT automated image analysis at the 2020 T&O. SFSA is pursuing additional partners to continue this effort to couple AI to develop Quantitative Non-Destructive Testing (QNDT) in addition to other projects that support our three NGM focus categories: Smart Automation (job shop steel foundry manufacturing), Smart Data (machine learning and IoT), and Augmented Reality (work instructions, training, and video for AI/IoT). Please contact Dave to join our NGM group.

Keeping the Team Sharp: Honoring the Artisans

For the superstars in your organization, the ones who are always going above and beyond, the ones who show potential and commitment, there is a program that sets them apart and honors their commitment to professional craftsmanship in the Steel Casting Industry. If someone like this comes to mind, nominations can be made to Ryan Moore for Master Artisan Recognition.

The SFSA Artisan Program is intended to be adopted and used by steel foundries at the plant level to develop the skilled artisans required to keep individual companies adequately staffed and the steel industry vibrant. In upcoming months SFSA will be highlighting training that boosts knowledge and skills in critical areas of foundry production. Watch for Artisan Training Webinars to be presented in months to come. Be sure to share this important member benefit with production leads and others in your organization who may become tomorrow’s super stars, or Master Artisans.

Market News

The SFSA trends graph is encouraging. It clearly shows upward momentum for shipments and bookings from a year ago levels. The data for this graph represents the percentage change year over year using the 3-month moving average to smooth out the volatility inherent to monthly data. Looking at the February trends data in the Business Report, steel and stainless shipments are at parity with year ago pre-pandemic levels and bookings for both are above the February 2020 levels at 13% for steel and 17% for stainless. Of course, to determine how meaningful that is, you need to go back and look at Feb. ’20 vs. Feb. ’19 and so on and so forth. Since Feb. ’20 was 10% below Feb.’19, parity means we are booking at the Feb.’20 level and are still 10% below the Feb.’19 level. This is one of the ongoing challenges of trends data analysis. What we do know is when bookings continue to outpace shipments as evident in recent months, we can anticipate strong market activity to follow.

Casteel Commentary

How much steel does China make? In 2000, China had a steel capacity similar to the U.S., about 100 million tons. In the past 20 years, they have added l 80 million tons every two years so that they make 900 million tons or half the steel in the world. Steel production is primarily the conversion of ore and scrap using energy to produce steel. China imports at world prices; ore from Australia, scrap, and coal for coke from the U.S., and energy from the Middle East. The labor cost of the steel is less than the cost of shipment to the European or North American market. This disparity between market forces and China’s production is also seen in aluminum production. China, which is energy short and water limited, went from making less aluminum than the U.S. to making more than half the aluminum in the world. Aluminum production is normally located near cheap electricity commonly hydroelectric energy. It takes 13,000 to 15,000 kWh to produce a ton of aluminum that sells for $13,000 a metric ton implying an average electric cost for world aluminum production of $0.03/kWh. (agmetalminer.com…).

It seems clear that China’s investment in steel and aluminum capacity is driven not by competitive advantage but by a national strategy to dominate these materials in the world market. This investment to dominate is also seen in their investment in steel casting capacity. These investments took advantage of the 30-year capital investment cycle where the infrastructure from the prior boom of 1965 through 1982 was finally liquidated in 2001 and global economic growth met inadequate capacity forcing up prices and resulted in the new round of investment in 2004 until 2014.

Globalization made large multinational corporations and government entities shop the world for the best prices. Investment went to China to exploit the rapid growth for future market share and to capture the low costs of a mercantilist system that was designed to displace mature and efficient producers in developed economies. Globalization hollowed out the manufacturing infrastructure of the developed economies and as the dominant world market, North America took the hardest hit from these non-market pressures. Trade policy assumed that domestic competitors were inefficient which was reasonable in the early 1980s but the public policy paths in North America gutted the incentives to make long-term investments in capital intensive industries. The damage though extended to all the developed economies.

The pandemic exposed some of the weaknesses that were the result of policies that made efficient manufacturing in North America less profitable. It exposed trade practices that allow competitors to exploit the North American market, to take our best technology, use our financial resources, and sell to our markets. Service industries and financial institutions became wealthy while manufacturing investment was deteriorating.

We are now in a precarious position where we no longer have the capability or the capacity to produce critical items needed for our economic well-being, or more troubling, for our national security. We depend not primarily on our allies but on competitive regimes that are planning to dominate their regions and perhaps the global economy.

So one challenge we face is that in a conflict or confrontation, we may not have the capabilities we need, illustrated by the lack of PPE during the pandemic. Another challenge is that if China has a financial event because of heavy indebtedness and internal conflict, global markets could collapse. If we suffer from a significant financial event because of the current instability in the markets, we could see market challenges from imports and trade or we could precipitate another global financial crisis.

If none of that occurs, our current limitations make it difficult for us to modernize and maintain our commercial competitiveness and our technology dominance to provide for prosperity and security. But we are most likely to see a boom of demand since the hollowing out of the production investment and the move away from global supply from adversaries will make our products in short supply as we run into the capacity constraints that are exacerbated by our past and current trade and public policies.

While the development of EVs with the need for energy and materials and the move to more infrastructure should provide support for our near and medium-term markets, we need to be well aware of the risks and challenges we face. Given the growth of government financially, we need to understand and position our industry to become an essential component of the needed economy.

These are challenging times!

Raymond