Metal Market Update - May 2020
Greetings!

We trust this email finds you well and we hope this information adds value to your busy day. We appreciate the opportunity to connect with you and your Team in all facets of the business cycle so please don't hesitate to call us at 704.568.3001 or email us at sales@wardve.com  if we can be of any assistance.

With the COVID-19 pandemic canvassing the globe right now, please stay safe by following the CDC guidelines and be well!
Industrial Manufacturing and Raw Material News 
Continuing March’s trend, the ISM Manufacturing Index (PMI) shrunk more in April, ending at a 41.5 reading compared to March’s 49.1. The coronavirus pandemic and global energy market weakness acted as a one-two punch to near term conditions. As states begin to open back up, there is hope that activity has hit bottom and will begin to recover soon.

The April Consumer Confidence Index dropped to 86.9 from March’s 118.8. The decline was heavily influenced by the sharp contraction in economic activity and the surge in unemployment claims. Although consumers were pessimistic about current conditions, they are optimistic that the economy will show signs of improvement in the coming months.

What a ride it has been in April with WTI Oil Pricing . The month began at $20.21 per barrel, sunk into negative territory (-$37.63) in the middle of the month, and finally settled back at $18.84 per barrel to end. The past couple of months have revealed the biggest oil demand collapse in history. With storage tanks filling up quickly, the race to cut production and employ other measures to prop up prices is on. Expect oil price levels to remain depressed until the global economy begins a sustained rebound.

The online US Oil Rig count is at 408 which is down 256 compared to last month's report and down 582 from May 3 of 2019. This roughly equates to a 60% drop since this time last year.
Nickel was one of the few commodities to actually gain value in the month of April. It started out the month at $5.11/lb. slowly increasing to settle at $5.56/lb . Reduced work forces at nickel mines due to COVID-19 have helped to buoy the price as a result of less supply in the short term.

Even with a few domestic steel mills idling portions of their capacity, the steel plate market remains fairly even keel with regard to pricing. As the economy inches closer towards opening back up, the spot market could see intermittent price fluctuations.   

Domestic stainless mill deliveries are running from 6 to 7 weeks, while Duplex stainless mill deliveries and Nickel alloy plate deliveries are in the 7 to 9 week range. Carbon Steel plate mill deliveries are still in the 6 to 10 week range.

Tubing deliveries range from 3-8 weeks for stainless steel depending upon stock availability and up to 8-14 weeks for nickel alloys. Carbon steel tubing deliveries are still carrying longer lead times anywhere from 6-16 weeks.
Section 232 (Tariffs on Imported Steel and Aluminum) and Section 301 (Tariffs on Chinese Final Products)
Effective June 1st 2018 - the Trump administration imposed 25% steel and 10% aluminum tariffs (section 232) on all countries including the European Union, Canada and Mexico. The month of August finally showed some clarity and stability in material pricing and availability as we have settled into the new norm pending better trade deals.

The Section 301 tariffs that are now in full effect on imported finished Chinese products have definitely made an immediate impact on the purchase of more domestic pressure vessels and heat exchangers.

A lot has happened over the past two years so we've condensed this section to only show the recent month's activities. Please refer to previous newsletters for the full story.

12/4/19 update - The Trump administration reports that talks with China are going very well. The US stock futures jumped early on Wednesday (12/4) after Bloomberg reported that Beijing and Washington would complete a phase one agreement before another tariff deadline on December 15.

12/12/19 update - US and Chinese negotiators reach a tentative phase one trade deal. The Chinese delegation is scheduled to travel to the US on January 13, 2020 to sign the phase one deal.

2/3/20 update - The Phase 1 deal was inked in January. Chinese officials are now hoping that the United States will agree to flexibility on some promises in the Phase 1 trade deal as China deals with the outbreak of COVID-19.

3/2/20 update - COVID-19 has slowed some of the agricultural sector purchase promises from China per the Phase 1 deal. The Trump administration has ensured further aid to farmers until the deal is fully transitioned into place.

 4/6/20 update - The affects of COVID-19 are being seen now with decreased trade between the US and China by roughly $10.9 billion over the past few months per reports. Talks appear to be on hold until we get through this global pandemic.

5/4/20 update - President Trump has escalated his attack on Beijing's handling of COVID-19 as of late which threatens a more heated US-China trade war negotiation when both parties come back to the table.

Stay tuned as the trade talks continue to unfold.
ASME Code, TEMA and API Facts - Did you know?
Proof Testing

As an alternative to calculating the required thickness of a pressure chamber, the code allows vessels or vessel parts to be rated by means of a proof test. This option is sometimes needed when the configuration of a vessel is outside the scope of the code formulas. One example of the use of this method is for rating of dimpled jackets. A small representative panel of the jacket is welded to a backer plate, with the same configuration and weld details as the production unit. The panel is then pressure tested until it leaks, or until a desired pressure is held. Code formulas give the allowable rating based on the final test pressure. The formulas account for the code safety factor and the reduced material strength at higher temperature ratings.

TEMA Update - The 10th edition of the TEMA Standards are available for purchase as of April 15th, 2019. Please visit www.tema.org to get your copy on order today!
Material Surcharge History  
90 Day Nickel Price Trend  
US$ per tonne
Top Seven Shell and Tube Heat Exchanger Failure Mechanisms
#2 - Fouling

Some processes are prone to solids forming inside the tubes. When you are working with those processes, you have to build a preventative maintenance program to keep the tubes as clear and clean as possible to ensure the heat exchanger can transfer heat as it’s intended.

A few methods of cleaning include rodding, rotating brush, high-pressure water blasting and chemical cleaning. The type of cleaning method employed is dependent upon how the material plates out and adheres inside the tubes. Sometimes, only chemical cleaning/recirculation will do the job but research into the various cleaning chemicals needs to occur because they can react with the tube base materials and cause metallurgical issues. It’s best to consult with your heat exchanger manufacturing and maintenance partners to ensure the best methods are being employed.

On exchangers where the fouling process is on the shell side (outside the tubes), it may be advantageous to design a removable bundle heat exchanger. Two common types are U-Tube Bundles and Floating Tube Sheet Bundles. With removable bundle designs, the tube bundle can be pulled out from the shell to provide full access to the outside of the tubes for cleaning. Specialty high pressure blasting is a common method of cleaning the outside of tubes. It’s important to remember that it can be difficult to fully clean the inside of the tubes in a U-Tube Bundle, as the bend at the far end sometimes limits the access with tube ID cleaning methods.

A fouled heat exchanger can bring your process to a screeching halt, creating pressure drop issues, reduced flow rates and compromised thermal performance.

When you are faced with a fouled heat exchanger, it’s great to have partners who not only can handle the cleaning/repair but also one who can build a new unit on an expedited basis to get your plant back up and running profitably.
The COVID-19 Pandemic
Am I calm, consistent and adding value to those around me?

This has become a daily call to action for all of us here at Ward as we challenge ourselves to be better each and every day while we navigate through this COVID-19 crisis. This has been a trying time for all and each one of us has grown and evolved in ways that we never could have imagined. We have learned a lot from all of the people that we've interacted with during this pandemic and we continue to be amazed by the collective desire by all to learn, laugh, lead, improve and succeed both professionally and personally. We have found comfort in the fact that we will continue to thrive through this crisis TOGETHER and that we will be better and stronger because of it.

The following is a great illustration of how we all go through things differently so please be sure to stay safe and healthy while showing kindness and empathy towards others.

Be well.