Canadian Plastics

Die casters survive high energy costs through surcharges

North America's die casters have taken a hit in the wallet from high energy costs. To keep their businesses afloat, more than half are passing on these cost increases to their customers....

December 1, 2005   By Rebecca Reid, associate editor



North America’s die casters have taken a hit in the wallet from high energy costs. To keep their businesses afloat, more than half are passing on these cost increases to their customers.

More than 50 per cent of North America’s die casting operations have implemented energy surcharges. By the end of the year, it is expected to rise to 80 per cent, according to a survey of its members from the North American Die Casting Association (NADCA) in Wheeling, Ill.

About 10 per cent of the NADCA’s 4,000 individual members and 300 corporate members, are Canadian.

Daniel Twarog, president of the NADCA said die casters in both Canada and the U.S. have been severely impacted by offshore competition. As a result, there was no question that energy surcharges were needed to stay profitable.

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And Twarog doesn’t expect implementing energy surcharges will give foreign die casters a further advantage over die casters in North America.

“China is also facing the same energy problems,” he said. “I’ve been to plants in China that weren’t running because the government wouldn’t turn on the power. So not only do they have the high cost of energy, they can’t even get it.”

Twarog visited China in August 2004.

As well as implementing surcharges, die casters can minimize the amount of energy they use through best practices, Twarog said.

For example, the average die caster uses around 2,000 BTU/lb. to raise the temperature of aluminum from room temperature to 1,350F, according to information on the NADCA’s Web site. However, this can be accomplished using only about 500 BTU/lb.

Additionally, preheating could save die casters up to 10 per cent in energy costs, and using heat transfer pumps can save almost 30 per cent, according to the NADCA.

Preheating combustion air can reduce 30 per cent of the energy associated with that task, and using oxy-fuel burners can help save energy as well. And, compared to a typical reverb furnace, stack melters use 50 per cent less energy, the NADCA said.

In fact, a study by the NADCA indicated many in the industry could cut their energy bills in half through best practices.

With price of natural gas increasing from about US$6/MBTU to over US$12/MBTU, the NADCA estimates the melt energy cost on an 80# (ship weight) die casting has increased from US$1.69 to US$3.38. These figures were based on industry averages for percentage of total energy used for melt loss (four per cent), scrap (five per cent), customer returns (1.5 per cent) and shot yield (65 per cent).

As a result, die casters need to melt 141# of aluminum to get 80# die casting, the NADCA said. Factoring in furnace efficiencies at 25 per cent, die casters on average are expending 282,000 BTUs to simply melt the metal for an 80# (shipped weight) casting.

Through best practices the NADCA estimates die caster can reduce the amount need to melt from 141# to 98#.


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