some customers have made changes in their purchasing habits to account for recent increases in raw materials prices, but for the most part, everyone is at the mercy of the volatile market. “As you can imagine, customers


don’t like price increases,” he said. “In some cases, they buy less when prices are higher. And they pass on what they can to their customers.” Following is a look at three raw


materials markets that could infl uence the cost of the next casting you buy.


Casting Alloys in Demand One material is more important


to metalcasting operations than any other: metal. T ese days, the market for melt materials is in serious turmoil. “T e whole [iron] industry has


been turned upside down in terms of pricing and availability,” Peaslee said. “T e suppliers aren’t taking on any new customers. If you’re not getting enough, there aren’t too many people you can turn to.” According to Eugene Muratore, se-


nior foundry metallurgist for Rio Tinto Iron & Titanium America, Chicago, ferrous casters have three primary op- tions for securing the melting materi- als they need—revert (in-house scrap returns), steel scrap and pig iron. Due to the wide availability of inexpensive, quality steel scrap, the amount of pig iron used by the market segment de- creased for many years, Muratore said.


Table 1. Sample Ferrous Surcharge Formula Material


Carbon Raiser Additrol 75% FeSi


5% MgFeSi Copper


Scrap Steel Pig Iron


Cover Material Silica Sand


Silicon Carbide Furnace Liners


$0.14 $0.62 $0.74 $3.35 $0.20 $0.24 $0.13


$0.04 $0.41 $1.93


Resin Coated Sand $0.15 Total Surchage


$0.41 $0.15 $1.21


Base Price* Current Cost Change $0.39


$1.40 $2.79 $0.15 $0.48 $0.31 $0.06 $0.59 $2.00 $0.18


*All prices are per pound and include freight.


As a result, the majority of the domestic pig iron producers exited the market. Now, the market for low residual scrap is drying up, and pig iron is available only from overseas suppliers. For metalcasting facilities, the


movement of pig iron production off shore has only compounded the fact that the industry is a small player and subject to the whims of other manu- facturers’ purchasing patterns. “Big steel is the dog, and we’re the


tail,” Muratore said. As for the recent turmoil in the


scrap market, Tom Cobett, a consul- tant who previously worked for several decades with an alloy supply company, said manufacturing itself is changing. “T e biggest thing we’re seeing in


the marketplace is that manufacturing scrap—punching, busheling, stamping scrap—isn’t as widely available as it used to be,” he said. “And I’m not sure we’re ever going to see it come back to where it used to be.” According to Cobett, several mar-


ket conditions have made both sources of steel scrap less bountiful. One, fewer things are made of metal than they used to be. Conversions to plastics and other materials have shrunk the quantity of prompt industrial scrap made in manufacturing plants. (For example, Cobett points to the reduc- tion of metal components by weight in automobiles.) Two, the high scrap


prices of the last several years pushed people to sell their exhausted products in a timely fashion. Finally, a familiar refrain comes


up for purchasers concerned about raw materials availability: emerging markets are gobbling up the previously plentiful supply. “T e demand in Asia is so huge,”


Muratore said. “It’s at six to eight times the historical demand.” Currently, no shortage has been


reported for the primary nonferrous casting alloys; from aluminum and copper to tin and zinc, the metals are out there. “Most of the nonferrous materi-


als are readily available, but pricing has been pretty wild,” Henning said. “Originally, we all felt the demand in China for raw material drove the price up. But after that, we felt speculators got into the market…they weren’t getting the returns in the stock market or money market, so commodities were where they could [succeed]. But recently with the stock market drop, it has caused the commodities to drop.” Copper has been one of the most


Dae ra sum que perum cullabo. Exped quidi nate elisimus sum est, quia nos ipsanturio. Derepudi dolupta tendae quid modis vollectis int


volatile of the nonferrous materials. Even in the absence of a true market shortage, Cobett said purchasers of copper-based casting alloys should behave as if there were one. “Everyone wants it, and yet there is lots of copper (around 10 tons per


Sept/Oct 2011 | METAL CASTING DESIGN & PURCHASING | 21


$0.017 $0.010 $0.594 $0.661


-$0.563 -$0.054 $0.242 $0.182 $0.023 $0.173 $0.070 $0.034


Surcharge $0.001


$0.001 $0.011 $0.016


-$0.006 -$0.045 $0.058 $0.005 $0.008 $0.002 $0.000 $0.001 $0.05


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