SFSA Casteel Reporter – May 2021

Casteel Commentary

As often discussed here, public policy in the U.S. and the rest of North America has been unsupportive of capital-intensive industries like steel foundries. We can see this in the acquisitions of steel producers including foundries by European and Asian firms. With the plentiful supply of investable capital in North America and the efficiencies and technical capabilities of the industry, investment should be attractive but…

The industry has not had the attractive profitability that would warrant investment by those with capital. This lack of investment coupled with global supply chain development has hollowed out our industry. The reinvestment cycle that occurs every thirty years that was present in the 1970s and 2000s recapitalizes and modernizes our type of industry. In the 1970s, that global reinvestment centered in North America. In the 2000s it centered in China. This was the subject of the commentary last month.

This month we need to look at our remaining capacity and understand what that may imply for our future business conditions. We may be in a cycle like in the 1960s and 70s where steel casting producers are profitable and stretched to their capability to meet a surging demand that exceeds our ability to supply…

2021 Cast in Steel Competition Results

Cast in Steel Competition: Thor’s Hammer Premier, April 30, 2021

“Ben’s Honorable Mentions” (special guest Ben Abbott from “Forged in Fire”) recognized for special attributes and creativity:

• Most Creative Alloy Combination – University of South Alabama
• Honored for Unique Shape, Most Likely to be Confused for a Wrench – Art et Métiers Science et Technologies
• Honored for the Challenge of Their Casting, Most Likely to Explode – St. Martin’s University
• Most Intricate Casting – Georgia Southern University
• Most Interesting Head Design – Texas State University Team 1
• Honored for the Strength of the Points, Most Needed in a Zombie Apocalypse – Texas State Team 2

More than $8,000.00 in overall prize money has been awarded to students. SFSA and the Steel Founders’ Society Foundation remain ever thankful for the Cast in Steel Community of support. Special thanks to this year’s sponsor, General Kinematics.

FEF Thor’s Hammer Auction

Own a piece of Cast in Steel history. SFSA has donated this year’s Cast in Steel projects to the Foundry Educational Foundation (FEF) for an auction that will raise funds for student programs. The auction is planned to begin on June 7th and will be presented on the FEF Website. View each project at Castinsteel.org and find your favorite. Then, mark your calendar for June 7th.

EHS/HR Meeting

The EHS/HR group will be meeting virtually this month on May 27th. The EHS portion of the meeting will be held in the morning and include a regulatory update from Guimond & Associates. POK will present their safety program including an emphasis on hand safety and a representative from Nucor will discuss leveraging new technologies for a safer work environment. The HR sessions will be held in the afternoon with a presentation from SFSA and Barbara Allyn on the Artisan training program, followed by a presentation on how the Biden Administration will impact union and nonunion environments in terms of federal labor law. Both morning and afternoon sessions will include an industry round table and all members are invited to participate but must register to attend. Please use the following link to register: https://www.surveymonkey.com/r/SFSA-Meet-52721

2021 Scholarship Recipients

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

This year’s conference will be an in-person meeting on December 8-11 in Chicago at the Loews Hotel. We look forward to being back together and celebrating the T&O’s diamond jubilee – 75 amazing years of steel foundry collaboration!

Honoring 75 Years of Technical and Operating Innovations, SFSA is hosting a children’s art contest! Any child or grandchild of a member company employee may participate. Work should honor the people and processes that go into building steel castings through any form of artistic expression – drawing, an image of a sculpture, painting, computer design, etc. Submission image quality should be at least 300 dpi, must be original works, and emailed to kschumacher@sfsa.org. Third party artwork, elements, materials, or anything created by a person other than the child named as the artist should not be part of any submission. Your child’s artwork could be selected as the event image for the 2021 T&O Conference! Awards will include:

• Best in Show – $250 Amazon Gift Card
• Best in Age Group – $100 Amazon Gift Card
• Special recognition may be awarded for uniqueness, creativity, and expression of the topic. – $50 Gift Card

A flyer can be found here. Be sure to share with your employees. The deadline for submissions is June 30^th.

Research Highlight

The University of Iowa is advancing modeling capability to improve steel casting quality with 2 research projects. The 1^st project is developing an air entrainment and inclusion model to predict the formation of inclusions and to track where they end up in the casting. The model is being developed and refined using experimental data. Initial results showed that the drag side and vertical surfaces were clean. In another trial, plates were inclined at different angles to determine at what angle inclusions start forming. The plate tilted at 60° was cleaner than plate with 30° incline and the horizontal plate. The inclusions for the tilted plates seem to concentrate towards the bottom which is the in-gate end of the plate. Filling flow around a circular core was also investigated; the inclusions seem to concentrate toward the in-gate side of the casting. Ring castings with a notch (recessed section) and a dirt trap (raised section) on the cope were also evaluated. The idea was that the inclusions will circle the ring until they encounter the notch or the dirt trap at the top. The casting with the notch had more surface inclusions than the one with a dirt trap but neither feature caught the majority of the inclusions as intended. This new model for air entrainment with inclusion generation and tracking is now implemented in a commercial software. More experiments are planned to continue comparison of simulation results and experimental data.

Leveraging the inclusion model, the Clean Steel project is investigating the effect of gating systems and filters on casting quality. Preliminary results showed that the effect of filters was more obvious than the difference between the gating systems. It was thought that it could be due to the test castings being small and that the fall height was not high enough so there were not a lot of inclusions forming. Additional heats are planned with tall sprues in an attempt to test the worst-case scenarios and see if the differences between gating systems can be quantified.

Keeping the Team Sharp

Artisan training webinars with Barbara Allyn will be introduced at the SFSA June HR/Safety Meeting. This material is prepared for foundry workers, supervisors, and anyone who would like to perfect their knowledge of steel casting practices. Webinars will be held on the 3rd Thursday of each month beginning June 17th. The webinars will be made available on the SFSA Wiki. Watch your email for detailed information and share with employees that are ready to learn more and commit to being their very best on the job.

Market News

Steel and stainless casting bookings continue to outpace the upward trend of shipments with steel bookings exceeding year ago pre-pandemic levels while backlogs remain strong. AISI reported that March steel shipments were up nearly 20% from the prior month and 2% over the prior year. Department of Commerce data for nondefense capital goods and ferrous foundries show that a recovery is underway. This is certainly positive news but as noted in the commentary, capacity constraints could be a growing challenge for our industry.

ITR Economics reported in March that metalworking machinery new orders and US construction machinery new orders transitioned to an accelerated growth phase meaning that they are above year ago levels and ascending rapidly. US mining production new orders (excluding oil and gas) is in the early stages of recovery due to rising commodity prices. The outlook for heavy duty trucks has been lowered as the semiconductor shortage has expanded from light vehicle manufacturing to also impact truck production. Oil and gas is still below year ago levels but rising prices are expected to bolster production for this year and well into 2022.

The price of steel and copper continues to rise with speculation that the peak is not yet in sight. MetalMiner reported that domestic steel prices posted double-digit month-over-month price gains and prices in Asia are on the rise due to rising costs of iron ore based on strong demand. Similarly, tight supply has driven copper prices to reach record highs this month. The stainless-steel market has also been hampered by a supply decrease as a labor strike at nine Allegheny Technologies Inc. (ATI) facilities has been ongoing for nearly two months. The full monthly metals index report from MetalMiner is available online.

Casteel Commentary

Steel casting capacity is incalculable. Capacity is a slippery concept and is tied to the equipment and production capability of the physical plant. Early in the modern steel industry, in the 1920s through the 1950s, making steel was the limit of production. Capacity was determined by the ability of your melting furnaces to make hot steel. After that in steel mills, capacity depended on some equipment monument bolted to the floor that had a throughput that limited production. It might be melting but it was more typically the rolling or other finishing operations.

Some steel foundries had similar limits based on the mold production capability. In the highest volume market segments like rail castings, capacity could be defined by some real production limit. In many foundries and especially now, capacity is not limited in most plants by the monument bolted to the floor. SFSA has tried to grapple with determining our casting industry abilities through surveys and analysis. Thirty years ago, we tried to formulate a definition of capacity that could be used by our industry but failed. Without a single operation limited by throughput, what would capacity mean? In most operations, the maximum production capability was limited by product mix and workforce. Sometimes it would be heat treat, sometimes core making, and often just in finishing.

The SFSA directory asks for the reported capacity by plant. This data is biased high because all plants report their maximum conceivable production and it is biased low because many plants do not report. This does however give us some limited indication of industry size and capability. SFSA started targeted estimates of capacity in the late 1970s. Since 1990, we have tried to estimate industry size through a simple survey asking each plant for their maximum single month production in the last 48 months. The idea is that schedules and customer demand push each plant at least once with their current product mix and workforce to produce at their existing capability. This is not a capacity that assumes that the workforce is not a constraint. In our industry frequently, the workforce is the critical constraint on production.

Using this data back to the early directories and assuming that capacity was in some way ties to the recent prior years of production, it was possible to estimate capability. The graph shows the estimate of capacity based on the prior 4 years of production compared to the reported capacity from the directory. This is likely a better measure for the trend of capability than capacity but would be a more critical measure of industry level of business.

The challenge of workforce availability makes this type of analysis less helpful. It does show the lack of capability in the mid-2000s and early 2010s. The apparent increase in capability from 2014 to 2018 is probably overstated since the workforce has become the limiting factor in production.

We may continue to face challenging times with pricing pressures and global competitors, but we may…

End up with inadequate capability in a demanding market and inflationary conditions that will make our throughput the limit on our profitability. We may face circumstances more like the 1970s than the 1980s where our challenge will be production and not sales. The reduction of capital investment worldwide with the fragmentation of the global trading system and the distortions of the North American financial system may place a premium on the required infrastructure to maintain the economy and expose the lack of capability in much of our industry including the production of steel castings.

Raymond