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issue: November 2006 APPLIANCE Magazine European Edition

Metals
Shifting Choices


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by David Simpson, contributing editor

Pricing and industry mergers are changing the landscape of the metals industry and forcing appliance companies to make some critical decisions.

Heat treatment adds strength to parts such as these. Heat treating can be done before or after parts have been formed. According to Blue Blade Steel (Keniworth, New Jersey, U.S.), working with pre-hardened material can be no more demanding than working with non-hardened metals. Shown here is a door bracket and motor brackets.

Against a backdrop of historically high, unstable commodity prices and sometimes-spotty availability, appliance producers have had to cope. On the London Metals Exchange, aluminum pricing at one point in May was up 48 percent from its price in January. Copper prices have doubled in the last year, and zinc has also been up.
The litany could go on, but the bottom line is that appliance producers are going to have to live with the situation now and in the immediate future. Given that metals are commodities, appliance companies are restricted in their responses. This is especially true since plastics and other alternatives are also under price pressure.

Metal Merges

One major issue affecting the global steel industry is consolidation. While global steelmaking capacity is not shrinking, where it is located and who controls it is changing. Notably, China has become the top steel producer, and continues to add capacity. Meanwhile, existing companies are changing ownership at a rapid pace.
In late June, the 6-month tug-of-war between steel giants Mittal Steel and Arcelor seems to have been settled: Arcelor’s board backed the latest merger offer from Mittal. And while Mittal already has European and U.S. antitrust approval for the merger, the closing date of the merger transaction had not been announced as of press-time.
The new steel company that would result from the merger, Arcelor-Mittal, will be headquartered in Luxembourg and will be listed in New York, Paris, Madrid, Amsterdam, Brussels, and Luxembourg. The new company’s industrial and corporate governance model will be based on Arcelor’s model. It is estimated that worldwide steel production by the new company will command about 10 percent of total global output.
While Arcelor opposed the sale of Dofasco, its steel producing business in Hamilton, Ontario, Canada, that sale appears likely as Mittal’s U.S. antitrust approval was contingent on the sell-off of Dofasco. Germany’s ThyssenKrupp is the prospective buyer.

Motors with copper die-cast rotors, following years of research, are finally finding their way onto the market in greater numbers. Compared to motors with aluminum rotors, those with copper rotors can either increase electrical efficiency when motors are held at the same size, or reduce size and weight when horsepower and/or efficiency are held constant. In addition, according to U.S.-based Copper Development Association, Inc., motors with copper rotors can cost less to produce. Siemens AG (Munich, Germany) has optimized the rotor design and recently introduced three new motor product lines to the North American market through its U.S. operating company, Siemens Energy & Automation, Inc. In addition to Siemens, Germany’s SEW-EURODRIVE GmbH & Co. KG (Bruchsal, Germany) currently offers its DTE and DVE series of high-efficiency motors with copper rotors. FAVI S.A. (Hallencourt, France) is producing die-cast copper rotors for use by other motor manufacturers, including ITT/Grundfos in Europe. FAVI has communicated with European appliance companies about motors and with Embraco (Joinville, Brazil) about compressor motor applications.

Playing by the Rules

Regulatory changes are also affecting steel buyers. Notably, the EU’s RoHS directive, which deals with the restriction of hazardous substances, is affecting steel, along with electronics (including lead-free solder) and other manufactured products. In the steel galvanizing process, Chrome 6 has provided high corrosion resistance when used in passivating the steel. But as of July 1, Chrome 6 is no longer acceptable for products shipped in Europe due to RoHS.
“Unfortunately, passivating alternatives such as Chrome 3 or chrome-free products are more expensive to apply, and they don’t protect as well,” observes Peter Recchia, manager of sales and service at United States Steel (Pittsburgh, Pennsylvania, U.S.) “Besides, a lot of the RoHS specifications are unclear. We are still discussing details with the EU. However, we have converted to chrome-free in our U.S. Steel Kosice operation in Slovakia. Customers such as Whirlpool Europe and Electrolux are using this type of galvanized steel. We are also adding a new hot-dip galvanizing line in Kosice to meet the high-quality needs of the appliance and automotive markets.”

Finding Alternatives

With all of these issues at hand, it’s no wonder suppliers and OEMs are feverishly looking for ways to save costs. Stainless steel is of special importance for many major, commercial and medical appliance producers, not to mention makers of grills and small kitchen appliances. The premium material has gravitated from high-end, professional-style major appliances to more mid-priced products. But giving consumers the look they prefer at an attractive price has become increasingly difficult.
One culprit in pricing has been stainless steel’s nickel content. Nickel is at or near its highest price point since the 1980s. The 301 and 304 stainless steel grades commonly used in appliances contain from 6 percent to 8 percent nickel.
Alternatives to these high-nickel grades do exist. One choice is 201HP. With about 4 percent nickel, it is less costly than 304, while properties and appearance are said to be similar.
“There is still interest in coated 430 stainless steel products,” says Lee Price, principal engineer, Applications Engineering at AK Steel (Middletown, Ohio, U.S.). “This has been especially true this year. Type 304 stainless has 8 percent nickel while 430 has no nickel addition.”
Price adds that in June of this year, surcharges for 304 stainless were almost six times the amount of 430 surcharges. However, 430 corrosion resistance and formability are reportedly not as good as 304.
Some appliance producers market steel with painted or film finishes that mimic the look of stainless steel or other metals. Vinyl film advantages might include lower cost, resistance to fingerprints and magnetic properties. This could permit the easy attachment of notes to a refrigerator door, for instance.
A recent market addition is PLADUR M, a coil-coated steel whose surfaces have the appearance of high-quality metals such as stainless steel, titanium or copper. The material comes from the Color Profit Center of ThyssenKrupp Steel AG (Ferndorf, Germany) and is now in use at a major home appliance manufacturer. The look is provided by a metalized film that is laminated to a readily formable coated sheet (electrogalvanized sheet or hot-dip coated GALFAN sheet) in a coil coating process. The new product family is insensitive to fingerprints and can be supplied in both glossy and matte or brushed metallic finishes. The surface is also available in various colors.
An important point is that this system of steel, adhesive and film is designed to be suitable for all manufacturing technologies commonly used in the appliance industry. For instance, the material is amenable to deep drawing, folding, roll forming, and punching. It also complies with relevant environmental and waste disposal requirements. Hexavalent chromium-free systems are used exclusively in the pretreatment of the coated sheet, and the material is halogen-and PVC-free. It is available in coil or cut lengths, with or without a strippable protective film.
Aluminum is also being billed as a stainless steel substitute. “In a response to the volatility of stainless, the aluminum industry has been active in proposing its own possible material solutions or substitutes where the product may fit component design,” says John Dobek, president, Stainless & Aluminum Products, Macsteel Service Centers USA (Newport Beach, California, U.S.). “Aluminum is available in many alloy and temper combinations. It offers superior strength to weight when compared to other metals. Aluminum is available in a rolled-on finish (brushed), which gives it the appearance of stainless at one third of the weight, making it a cost-effective alternative.”

High-pressure die-cast (HPDC) parts made of aluminum are now reportedly able to have their strength doubled through a heat treatment process invented by Australian light metals researchers. While heat treatment is commonly used to strengthen wrought and other cast aluminum parts, it has previously not been practical for high-pressure die castings. The Commonwealth Scientific and Industrial Research Organisation (Canberra, Australia) has developed a heat treatment procedure that reportedly provides large strength improvements and an excellent surface finish, without blistering or distortion. The added strength means parts need not be as heavy as they currently are to do the same task.

Sparking New Partnerships

At a time when appliance companies can no longer take their metals for granted, enlisting guidance from metals suppliers would seem to make sense for appliance companies eager to keep costs under control.
Dofasco Inc. of Hamilton, Ontario, Canada has developed an approach to customer service that focuses on cost reduction and improved efficiencies for customers. In this Early Vendor Involvement program, the integrated steel supplier works with a customer’s design team from the initial design stage to the finished product, employing its metallurgical, material science and manufacturing expertise to help customers achieve high performance with Dofasco-supplied material. This gives the customer access to knowledge and information that can lead to improved manufacturing processes, better quality materials, improved designs for future products, and significant savings through reduced costs.
One of the success stories of this program is the Electrolux range (cooker) manufacturing plant in L’Assomption, Quebec, Canada. “We have been conducting teardown sessions in L’Assomption since 1999, and each successive year we were able to improve on the amount of implemented cost savings,” says Stan Lipkowski, Dofasco projects manager—manufacturing, market development, and product application. “In 2005, we had a record year. The implemented ideas from our teardown sessions resulted in reduced steel purchase costs for the customer.”
“We have joint tear down sessions with Dofasco representatives at an Electrolux Major Appliances facility,” confirms Rupesh Page, purchasing agent, steel and metal/stampings at Electrolux Major Appliances Canada. “We identify cost saving ideas during tear down, and after analysis the feasible ones are taken up as projects that are owned by both organizations. Resources are allocated accordingly.”
A key benefit? “We get ‘out of the box’ ideas as we get access to good practices of the industries where Dofasco is supplying steel,” Page says.
Dofasco has conducted teardowns in conjunction with various North American appliance OEMs for virtually all major home appliances. By conducting a step-by-step teardown process and evaluating each part, its specifications and its critical-to-quality parameters, it is able to determine whether any changes in steel grade or thickness, for example, could be implemented to reduce the overall unit cost. Past teardown sessions have generated several ideas pertaining to material utilization. Coupled with the company’s steelmaking capabilities, these have increased production yields for the customers’ steel parts.

Suppliers mentioned in this article:
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Blue Blade Steel
Dofasco Inc.
Macsteel Service Centers USA
Mittal Steel
ThyssenKrupp Stahl AG
United States Steel LLC
 

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