Under the headline, “Natural Gas Signals A ‘Manufacturing Renaissance,'” the New York Times (4/11, F6, Motavalli, Subscription Publication) reports that “the rapid development of shale gas technology has helped reduce energy imports and, in some cases, encouraged companies producing petrochemicals, steel, fertilizers and other products to return to the United States after relocating overseas.” Furthermore, Kevin Swift, chief economist at the American Chemistry Council, explains that European companies use oil-derived materials to make those same products, so, Swift says, “The US has a competitive advantage when oil is seven times as expensive as natural gas, but now we have more like a 50-to-1 advantage.” And a 2011 study from PricewaterhouseCoopers estimates that “high rates of shale gas recovery could result in a million new manufacturing jobs by 2025.”
Meanwhile, though, the Wall Street Journal (4/11, A3, Gold, Smith, Gilbert, Subscription Publication) reports, the vast drop in natural gas prices due to overabundant output has hurt gas producers, who are now focusing on more expensive crude oil, coal companies as utilities switch to natural gas-fired power, and railroad companies who are no longer shipping as much coal. The relative cheapness of natural gas is also calling into question the economics of nuclear, solar and wind power. However, electricity consumers are the biggest winners, as their power bills are dropping. For example, Boston-based utility NSTAR announced it would cut retail electricity rates for commercial customers by 34% this spring, and hopes to make a similar announcement for its residential customers in May.
In similar coverage, the Financial Times (4/11, Makan, Meyer, Subscription Publication) reports that the drastic price drop that started at the end of 2011 took many natural gas producers by surprise, disrupting plans the companies may have had to hedge against future production. For example, Chesapeake, the second largest natural gas producer in the US, for the first time since 2002 has not locked in prices for any natural gas this year. Gary Stromberg, a Barclays energy industry analyst, explained, “Companies don’t want to lock in a loss on their natural gas output,” adding, “But the lack of hedging leaves them much more levered to commodity price movements than is normally the case.”
Alcoa Reports First-Quarter Profit On Higher Revenue
The AP (4/11) reports Alcoa “said Tuesday that it earned 9 cents share in the first quarter.” The company “surpassed analyst forecasts for a small loss by selling more aluminum to a wide range of customers, including car makers and aircraft manufacturers, and operating its plants more efficiently.” The aluminum manufacturer “is considered a barometer for the economy.”
AFP (4/11) reports, “Sales also beat forecasts, rising to $6.01 billion in the first three months of the year, slightly more than in the prior and year-ago quarters.” Alcoa “said the quarter-on-quarter rebound was driven by strong productivity improvements across all its businesses, higher prices for aluminum, and a better volume and mix.”
CNN Money (4/11, Yousuf) reports, “Alcoa’s results are especially encouraging as fears about an economic slowdown in China, the world’s biggest producer and consumer of aluminum, continue to build.”
Chicopee’s Diecast Connections Grows Business Backed by Massdevelopment Growth Loan
MassDevelopment has provided a $300,000 manufacturing growth loan to Die Cast Connections Company, Inc., a Chicopee manufacturer of permanent mold casting and aluminum and zinc die-casting. The company will use loan proceeds to hire additional employees and purchase equipment and material in support of a new product, thus providing the necessary working capital to support growth. Over the last two years, DieCast has invested in technical advances and engineering software as part of its strategic growth plan. This strategy has generated innovative designs while controlling costs and quality, and the company is now focused on meeting orders that this investment created. The funds from the manufacturing growth loan will support this new production.
To view the rest of this article, click here.
Ube shows sixth generation of all-electric presses
ORLANDO, FLA. (April 3, 8:20 p.m. ET) — Ube Machinery Inc. (Booth 603) is showing its new UF press, a machine with 950 tons of clamping force that marks the sixth generation of Ube’s all-electric molding machines.
David Bernardi, senior sales and marketing manager at said the UF is more streamlined that the earlier Ube all-electric. Also, Ube has switched from Mitsubishi to Fanuc electric servomotors. Bernardi said Ube builds die-casting machines for Fanuc Ltd., so the companies have a good business relationship.
To view the rest of this article, click here.