Monthly Archives: April 2011

Composites, Metals & Earthquakes: Tectonic Shifts

Hello everyone,

March was an ominous month in more ways than one. Our hearts reached out to Japan which incurred nature’s wrath in the form of a massive earthquake and tsunami. The Haiti disaster still lingers in our memory – even before the scars have barely healed, comes another calamity from the Asian behemoth. When it comes to innovation and never-say-die spirit, the Japanese have few peers. It was no surprise to read a Bloomberg Businessweek column that mentioned the Japanese as having already reconstructed some roads that were ripped apart by the March 11 quake. The wave of political unrest in the Middle East and North Africa regions in favor of democracy continued and sent crude oil prices on a northward spiral.

Fickle nature and mass political uprising…for a fleeting moment, I was reminded of the 2012 Armageddon prophecy.

CURRENCIES

It is possible that the Chinese Yuan could be included in the basket of currencies [currently includes the dollar, euro, yen and British pound] that sets the value of the IMF‘s SDRs. This was disclosed at an informal meeting of the financial leaders of the G20 nations at Nanjing in late March. Let’s wait and watch if this does happen, as it would be a positive step towards a more level playing field amongst nations on global trade and greater optimism on averting possible currency wars.

For the time being; currency wars, it appears, are poised to take a back seat in the global arena.

CHEAPER AND BETTER: THE DREAM COMBINATION

Comparisons can be odious. There is now a growing trend in the wind energy sector to make comparisons…wind versus nuclear energy, offshore vs.onshore, wind vs coal… The list goes on. The comparisons are indeed fascinating and reflect a great deal of analyses by proponents and naysayers alike. In an interesting feature in The Guardian, the EU Climate Chief has gone on record stating that declining cost of offshore wind energy makes it a genuine alternative to the crisis-hit nuclear industry (thanks to the nuclear crisis in Japan). Simply stated, generating energy from wind turbines at sea would be cheaper than building new atomic power plants. In the latest report from Bloomberg New Energy Finance, onshore wind power is now completely cost-competitive with coal. In North and Latin America, both are around $68/MWh. And this is without factoring the tremendous health cost associated with coal such as release of arsenic and lead as toxic air pollutants.

No doubt, there will always be yays and nays for any form of energy, more so if its renewable. The fact that analysts are debating the pros and cons makes it noteworthy.

UPWARD TRENDS: RESIN PRICES, CARBON AND GLASS FIBER GROWTH

Volatility in oil price has led to another increase in thermosetting resin prices (unsaturated polyesters, vinyl esters and epoxies) as announced by global resin majors – effective Q2, 2011. The saving grace is perhaps global increase in steel prices that was witnessed towards the beginning of this year and slated to increase even further driven by a strong rebound in global steel production. Contract prices for Q2,2011 are projected to be 40-45% higher than the same quarter in 2010, according to CNN. The latest news (as of April 4, 2011) is that soaring power costs and strong demand growth will boost aluminum prices this year. China is considering its first electricity price increase (since 2009) from generators to grids. As the world’s largest producer and consumer of aluminum, China’s output of the metal is likely to be curtailed as producers find their margins under pressure.

From a composites perspective, this is good news as prices of (rival) traditional metals are also on the upward trajectory.

Technological advances continue to be in the  forefront on glass fibers with leading global producers announcing a slew of new products that result in improved mechanical characteristics at lower glass loading of the molded composite for a variety of applications and processing techniques. Carbon fibers continue to hog headlines with the wind energy and automotive sectors (including CNG storage cylinders) poised for dramatic growth through 2015. Announcements of investments in new plants globally by fiber and resin producers vindicate their commitment to the industry’s growth and  testament to their optimism. Visitors to the various trade shows last month would have been overwhelmed by the exciting new developments on composites…fibers,resins, applications in infrastructure and processing techniques.

The fact that the composites industry is on the cusp of dramatic growth  is indeed a reality. This has come about through  sustained focus on the life cycle-cost-benefit analysis approach by fiber and resin producers alike and end users being made more knowledgable on  the long-term advantages of composites, in spite of higher prime costs.

SOUTH AFRICA RISING NORTHWARD?

It is quite probable that very soon BRIC could become BRICS. Yes, South Africa is likely to join the elite club of emerging markets which represents the economy of the future.

Since winning the World Cup bid last December to host the 2022 FIFA World Cup, Qatar has been making headlines on several fronts. With a projected 15.7 % growth in 2011, the world’ top LNG gas exporter plans to spend over $125 billion in the next five years on construction and energy projects. The tacit implication on extensive use of composites requires no overemphasis. Qatar scientists claim to have designed an artifical cloud [Arabian Business, March 2011] manufactured from light carbon materials and helium gas that would be held in place by solar power and moved by remote control to partially ward off the summer heat (that exceeds 40C).

When it comes to innovation, there is no dearth of regional talent in mitigating nature’s solar power to make us more comfy!

LOOK MA, NO HANDS

Computers have revolutionized our lives thanks to technology. The proverbial “info at the click of a mouse” may not be relevant in the near future. Per news reports, a company in Stockholm is developing the first mass-market eye-tracking device. It will let users do many things they now do with simply a mouse… just by looking at the screen. Just stare at a folder and it opens, read to the bottom of a page of an e-mail and the program skips to the next. The device reportedly directs harmless infrared light at the user’s eyes and captures reflections that shift with the user’s gaze. Computer hardware and software companies are already making a beeline to incorporate the eye-tracking system this time next year.

Any takers?

CHIN UP!

I end this post on a daringly optimistic note. According to Japanese mythology, tectonic plate-shifts can coincide with big ones above the ground also. Could the latest trauma signify historic change? In her book “The Shock Doctrine,” author Naomi Klein focuses on free-market ideologues who exploit crises to impose rapid and irreversible change in nations around the world. Fate may have just landed Japan the chance to unleash the doctrine on itself. Japan might well benefit from a shake-up that encourages entrepreneurship from grass root level, increases competitiveness and induces change. Japan has an enviable track record of rising like a Phoenix from the ashes… it came back with vengeance after World War II and surely can do it again.

Speaking of resilience, Composites are also often characterized as being resilient, remember?

Till the next post,

Cheers,

S. Sundaram

Email: SS@essjaycomposites.com
Twitter: @essjaycomposite

Advertisements