Stainless Steel Users Search for Substitute Materials due to High Prices

I usually quote only the beginning or a few paragraphs of these reports but almost everything in this synopsis is important to stampers, so I basically included it all.

Material substitution is always an option for a stamper, but it usually takes a lot of work with the customer designer and the supplier to negotiate a change in raw material. Not something one does lightly, but occasionally necessary when material prices go through the roof.

I know I’ve pointed this out before, but it was months ago … it’s worth mentioning again. I run a small metal stamping shop. We use slide forming machines to get our stamping done. Slide forming machines are more sparing of expensive materials because they, as a general rule, don’t use a carrier strip to get their work done. So there’s less scrap. To check out slideforming some more, follow this slideforming link.

MEPS – Stainless Steel Review

Nickel prices have retreated somewhat from the record high they reached earlier this month. Although the price drew back from crossing the $US30,000 per tonne mark, it remains at over $US27,000 (cash buyer price) at the time of writing. Such elevated prices are causing increasing concern to stainless producers and their customers.

As a result of nickel’s price surge, stainless mills have already announced increased alloy surcharges for August sales. In Europe and North America, surcharges for type 304 flat products have almost doubled since January, and they seem certain to rise again in September. Along with hikes in basis figures, this has propelled transaction values for many nickel-bearing grades to record highs.

Therefore it is not surprising that users of austenitic grades are casting around for alternatives and examining whether they could cut costs by switching to other materials. Stainless producers say they have not witnessed much substitution so far. This is partly because the price of many replacement materials has also gone up significantly.

Among stainless steel’s rivals, copper prices have risen by almost 60 percent so far this year and also stand at record high levels. Galvanized steel sheet prices are currently about 40 percent above those of January, largely because of a 52 percent increase in the price of zinc.

Perhaps the most attractive alternative to stainless is aluminium, where the London Metal Exchange price in late July was a mere 3 percent up on its January figure.

They may be playing it down, but it is clear that some mills are concerned about long-term loss of market share. Stainless producers themselves are offering their customers a range of alternatives in an effort to prevent business being lost to non-ferrous or carbon steel materials. Such options include lower-nickel duplex grades and ferritic types. In the meantime, nickel’s fluctuations will continue to create problems for the stainless industry worldwide.

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2 Responses to Stainless Steel Users Search for Substitute Materials due to High Prices

  1. Like you alluded to in your second paragraph, changing material during the life of the part is a big challenge. Of course, purchasing is always looking for something that is less expensive to buy, but sometimes that is short-sighted and does not capture the whole cost of the material change. It is certainly possible that a lower cost material is available, but if it has reduced formability, splits may increase, leading to an increased amount of scrap. Problems can arise even with increased formability: wrinkles might now appear.
    I’d caution readers against blindly following the article’s suggestion that aluminum is an alternative to stainless steel. Although aluminum is lighter and potentially less costly, the modulus of aluminum (stiffness) is 1/3 that of steel, and that may affect the integrity of your part.

    Danny Schaeffler
    Engineering Quality Solutions, Inc.
    Website: http://www.EQSgroup.com
    Blog: The Future is Forming

  2. Michael says:

    Hi Danny!

    I too was surprised by that suggestion. I suppose there might be cases, especially in parts that are blanked only, where aluminum could form a substitute for some stainlesses. But I can’t imagine it happening in our work, for instance.

    We do a lot of flat springs. When we use stainless, it’s almost always spring stainless. Our substitute is usually up the price ladder from spring steel, heat treating and plating, to spring stainless, which needs no heat treat or plating. We get more accuracy, less variability in heat treat, no risk of hydrogen embrittlement. The part shape that comes off our machines is the part shape. Period.

    Substituting Aluminum would be a monumental task. I’m told there are some somewhat springy Aluminums, but we have no experience with them and I’d be hesitant to try that. Soft Aluminum we’ve worked in, but it would be useless for 99% of our work. And I don’t think we’re all that unique. So I too was surprised at the suggestion in the article.

    I’ve seen more success in switching within the stainless group. For instance, we determined that a job we were quoting in 300 series stainless didn’t need any special properties of 300, so we sought and got permission to quote in 200 series. Great idea, only they gave the idea to our competitors as well as the business.

    In another case, I’ve seen a 300 series requirement turned into a 409 requirement, with quite a substantial savings. 409 is barely stainless, but it was enough for that customer’s needs.

    Welcome to the blogosphere! I see you’re just starting out.

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