February 2024 Volume 6

FORGING TECHNOLOGY & EQUIPMENT Digital Engineering: Pushing the Boundaries of Innovation with Simulation Page 14 Improve Forging Performance & OEE with Scotch Yoke Technology Page 20 Official Publication of the Forging Industry Association

February 2024 forging.org

A Meeting in the Mountains: Preview of the 2024 FIA Annual Meeting of Members Page 62

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PRESIDENT'S NOTE

President's Note

A Quick Look Back…Then Onward! Six years…are you kidding me? My very first FIA boss – Chairperson Emeritus Jeff Jones of Forge Resources Group – offered this nugget to me with his greeting at one of my favorite FIA events, and the first meeting of the year - the FIA Midwest Meeting of Members, which has the feeling and joy of a family

reunion. It has only been a few months since our Fall Meeting, but this is the forging industry: great relationships and cannot wait to see one another again. And this is how I still see it after six years in. I genuinely appreciate all who come every year for the first meeting of the FIA calendar, and those who continue to show up throughout the year, to support and engage with the association and their industry peers.

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If you are happy with the direction of this organization, look no further than the 2017 FIA President’s Search Committee, FIA Board of Directors and FIERF Trustees to aim your applause. It all starts there with their vision and trust in the input from FIA staff and partners. Most importantly, not micro-managing, which many boards fall prey to, but rather aiming high, providing resources, and letting the staff fly high and get it done. Do we always get it right? No and we should not, and we learn from our stumbles and get back up because the directors and trustees back us. It is this process that needs to endure, and I’m happy to say our directors and trustees own it. Bravo!

FIA Midwest Meeting of Members 2024

How do I reflect on these last six years? Honestly, it has been a total blast. I have met some of the smartest, coolest people ever – plenty of characters, not sure I met a shy forger yet, and many dedicated men and women in our industry. All the relationships and seeing just how hardworking and dedicated everyone is, just makes me want to work harder and do my part to ensure this industry keeps growing and weathers whatever challenges come our way. Frankly, I would be mortified to let this industry down.

PUBLISHER James R. Warren jwarren@forging.org MANAGING EDITOR Angela Gibian angela@forging.org Editorial Staff

Board of Directors

Robert Brodhead Mark Candy Mark Derry Robert Dimitrieff Jose Lozano

Mike Morgus Matt Natale James Romeo Joe Schwegman

ASSOCIATE EDITOR Amanda Dureiko amanda@forging.org DESIGN Lorean Crowder lorean@forging.org

CHAIRPERSON Chelsea Lantto VICE CHAIRPERSON Jim Kravec

FIA MAGAZINE | FEBRUARY 2024 1

PRESIDENT'S NOTE

One other thing to note on this topic: our engaged members are always noticed, and we have a nice list of new board prospects every year. It is never a chore finding someone to serve, which is a great sign of organizational health. So, as the staff leader – a role I cherish – what really is the legacy opportunity here? What should I be aiming for? I’ve had a lot of success that has fulfilled me these last 35 years: meeting my wife at my first job and having two beautiful daughters; being on the founding team of MFG DAY while at FMA; starting my own company, creating dozens of new programs for industries that endure to this day, and finally the big one; interviewing with the FIA hiring committee and getting a tap on the shoulder by Ron Hahn of Scot Forge in-line boarding a flight back to Chicago sharing that I would be the next President & CEO of FIA. That made for a better weekend. Thanks Ron! The trust given to lead this industry group is my career opportunity of a lifetime. So that brings me to what has really been on my mind: succession planning. Creating an environment and mentoring/leading a team that endures. That is the legacy opportunity. The biggest gut punch I have in this position is learning of a forge that is closing due to no succession plan; just shutting the doors, auctioning off the equipment, and selling the property. Painful.

The FIA Team spent their holiday party at Sur La Table making pasta from scratch. Pictured left to right: Gabby Schultz, Events & Marketing Specialist, Megha Patel, Government Affairs Manager, and Tricia Abruzzino, Membership Programs & Sales Manager

Because of consistent board chair support, we have been able to recognize, promote and financially recognize our great performers, which is all our staff. We are a small enterprise (currently 11 staff) and proper and consistent recognition of one’s expertise is key. I am so blessed with a great team that really cares about you all and this industry, and I know from the constant feedback I get that you appreciate them. We have added two important pieces to the puzzle. First, we hired our intern Niamh Field to be a full-time member of the team as the Digital Marketing & Sales Specialist. We have seen great improvements in our social media engagement since she came on board. And most recently, we hired a new Senior Technical Manager, Dekland Barnum, who will relieve a few of us of the extra load we have been carrying as it relates to the foundation, government relations and general technical tasks. FIA Deputy Chief Executive, Angie Gibian and Sr. Manager Foundation & Workforce Development, Amanda Dureiko in Walker Forge sweatshirts

So, as we start our 2024 just a great big thanks to you all who support FIA; volunteering, speaking at events, committee work, lobbying work, serving on the boards. And thank you to those who pass along kind words for the staff; it is a joy to pass those along and the feeling is mutual. Let’s have a great year everyone! Best regards, Pictured: The FIA Team - Kathy Edwards, Amanda Dureiko, Angie Gibian, Andrew Zielinski, Lorean Crowder, Jim Warren, Gabby Schultz, Tricia Abruzzino, Megha Patel, Abiyah Yisrael, and Niamh Field

James R. Warren President and CEO Forging Industry Association

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FIA MAGAZINE | FEBRUARY 2024

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CONTENTS

FEBRUARY 2024 | VOLUME 6

PRESIDENT'S NOTE 1 President's Note WASHINGTON UPDATE

50 All Roads Lead To Sales & Marketing With Lean 53 Leadership and Management FAQ 54 Using Technology to Help Protect Against a Cyberattack 56 Overall Equipment Effectiveness (OEE) as a Quality System Metric 58 Staying Bigger than China INDUSTRY NEWS 60 HAMMER - A National Science Foundation Engineering Center Will Bring New Technology to Forging 62 A Meeting in the Mountains: Preview of the 2024 FIA Annual Meeting of Members 67 TimkenSteel Announces Intent to Change Name to Metallus Inc. 68 Onex Awarded Two Box Forge Furnace Contract 69 FIA Member Profile: NWI Defense 70 New ATI Opportunity 71 FIA Member Spotlight: Plant Engineering Services, Inc. 73 Forging Industry Association Welcomes New Senior Technical Manager 74 Welcome New Members 76 FIA Upcoming Events FOUNDATION NEWS 78 Donor Spotlight: Electralloy 79 33rd Forging Industry Technical Conference Call for Papers Now Open FORGING RESEARCH 80 Benchmarking Ergonomic Issues in the Forging Industry MEMBERS SPEAK 84 FIA Management Development Institute: Giving Managers the Tools They Need to Advance Their Careers AD INDEX 88 February Advertiser Index

5 FIA Government Affairs Update 6 House China Committee Releases Policy Recommendations ENERGY 8 No Energy Transition Without a Reliable Electric Power Grid 9 Navigating Energy Markets: Unveiling Insights from the Natural Gas 12-Month Strip EQUIPMENT & TECHNOLOGY 12 Flexibility and Productivity: The New FICEP Precision Forging Line 14 Digital Engineering: Pushing the Boundaries of Innovation with Simulation 20 Improve Forging Performance & OEE with Scotch Yoke Technology 22 Benefits of Direct from the Forge Intensive Quenching MAINTENANCE 26 Leveraging ERPs for Maintenance 28 Is It Time To Upgrade Your Forging Press Through a Clutch/Brake Conversion? AUTOMATION 30 The Automation Ladies Podcast featuring Chelsea Lantto of Trenton Forging 32 Robotic Tooling for Hot Forging Applications: Tips of the Trade MATERIALS 36 Overcoming Lightweighting Challenges 39 Seeing Is Believing: Visualizing How Metal Flows in Hot Working 42 SBQ Off to an Encouraging Start in 2024 45 Forging Ahead: The Power of Consistency in Steelmaking OPERATIONS & MANAGEMENT 48 Employee Basics Checklist – A Refresher

p. 12

DEPARTMENTS 1 President's Note 5 Washington Update 8 Energy 12 Equipment & Technology 26 Maintenance 30 Automation 36 Materials 48 Operations & Management 60 Industry News

78 Foundation News 80 Forging Research 84 Members Speak 88 Ad Index

FORGING TECHNOLOGY & EQUIPMENT Digital Engineering: Pushing the Boundaries of Innovation with Simulation Page 14 Improve Forging Performance & OEE with Scotch Yoke Technology Page 20 Official Publication of the Forging Industry Association

February 2024 forging.org

A Meeting in the Mountains: Preview of the 2024 FIA Annual Meeting of Members Page 62 Image Courtesy of Schuler Group GmbH and Farina Presse For advertising contact info@forging.org

FIA Magazine (ISSN 2643-1254 (print) and ISSN 2643-1262 (online)) is published 4 times annually, May, August, November and February by the Forging Industry Association, 6363 Oak Tree Blvd., Independence, Ohio 44131. Telephone: (216) 781-6260. Only (1) copy of the print version distributed at no charge only to members of the Forging Industry Association. Digital version distributed at no charge to qualified individuals. Subscription requests available at www. forging.org. Printed in the U.S.A. Periodicals postage paid in Independence, OH and additional mailing offices. POSTMASTER: Send address changes to Forging Industry Association, 6363 Oak Tree Blvd., Independence, Ohio 44131. Copyright © 2024 by the Forging Industry Association in both printed and electronic formats. All rights reserved. The contents of this publication may not be reproduced in whole or part without the consent of the publisher. The publisher is not responsible for product claims and representations or for any statement made or opinion expressed herein. Data and information presented by the authors of specific articles are for informational purposes only and are not intended for use without independent, substantiating investigation on the part of potential users.

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FIA MAGAZINE | FEBRUARY 2024

WASHINGTON UPDATE

FIA Government Affairs Update By Megha Patel

2024 is off to a great and busy start for all of us at FIA! From Lobby Day 2024 to a trade relief survey that kicked off a fair trade roadshow, the association has had its hands full, to say the least. Both of these undertakings are crucial to expanding our advocacy efforts and protecting the domestic forging industry. Lobby Day This year’s Lobby Day was a resounding success, a testament to the active participation of our dedicated members! The event brought together 28 representatives from 20 member companies (the largest number in FIA history!) from all over the continent to Washington, D.C. on February 6-7. Facilitated by our lobbying firm, The Franklin Partnership, FIA members and staff held productive meetings with over 40 congressional offices. During these discussions, they highlighted the urgent challenges facing the domestic forging industry. Key topics included advocating for the Leveling the Playing Field 2.0 Act, allowing successive antidumping and countervailing duties investigations, and securing tax relief for our members. A select group of members graciously extended their stay to help the association with its congressional appropriations request. The meetings were overall positive, and the congressional offices were receptive to the issues and requests presented. FIA will continue our advocacy efforts to ensure the North American forging industry remains robust and secure. FIA, supported by the SMI government relations firm, is actively pursuing $10 million in government funding through the Metal Forging Innovation Program for research and development projects. Encouragingly, the association was allocated $5 million in the fiscal year 2024 Senate bill though it is yet to be passed. While funding approval is not guaranteed, FIA remains optimistic about its chances to receive the funds and the boost it could provide to the domestic forging industry. Tax Update FIA is in support of the tax bill currently making its way through Congress. The legislation has three key provisions designed to benefit our members. Firstly, it reinstates immediate R&D expensing. Previously, businesses could immediately write off 100% of their R&D expenses, covering costs associated with the development, testing, and enhancement of products and services. However, recent changes make companies amortize their R&D investments over a span of five to fifteen years. This alteration resulted in an average additional tax burden of 32%. Secondly, the bill incorporates a pro growth interest deductibility standard. Many companies rely on loans to finance long-term investments in equipment and facilities. At the start of 2022, a stricter limitation on the deductibility of interest payments on business loans came into effect, elevating the cost of financing crucial investments in machinery and equipment.

Lastly, the bill allows full expensing for capital investments. Bonus depreciation enables businesses to deduct a large percentage of the cost of eligible purchases in the same year, rather than spreading the deduction over several years. Unfortunately, this provision expired at the close of 2022 and is undergoing a phased 20% reduction each year. According to the National Association of Manufacturers, private-sector R&D spending experienced a decline of 1.2% in Q3 of 2023. Since the imposition of a detrimental R&D amortization requirement in 2022, the rate of growth in R&D spending has dwindled from an average of 6.6% over the preceding five years to less than 1% in the past year. This is why the FIA, during Lobby Day, urged Congress to pass this pro-growth tax bill to ensure investment and job creation in the forging industry. U.S. Trade Survey As you all know, unfair trade continues to pose a significant threat to North American forgers, jeopardizing operations and weakening national security. FIA began a proactive effort in May of 2023 to explore opportunities for trade relief. In collaboration with Cassidy Levy Kent LLP, the association’s trade counsel, a survey was issued to gather crucial data from members to identify whether a trade case is feasible. The questionnaire assessed the effects of import competition on FIA members, taking into account the wide range of forging products and the unique challenges the industry faces on a daily basis. In fact, Cassidy Levy Kent kicked off a Fair Trade Roadshow this past January to visit members and better understand the forging industry. These visits allowed them to create a comprehensive narrative that accurately conveys our industry's challenges to decision-makers in Washington. For those seeking more information about our efforts in addressing import competition or the Fair Trade Roadshow, please reach out to FIA directly. Member engagement is crucial in our efforts to advocate for fair trade practices. Conclusion FIA is thrilled to be elevating our advocacy efforts year after year and remains committed to championing the industry's interests. Thank you to all the members who dedicated time from their busy schedules to join us for Lobby Day and contribute to the fair trade roadshow. We appreciate the ongoing support and encouragement of our advocacy efforts! Megha M. Patel

Government Affairs Manager Forging Industry Association Phone: 216-781-6260 Email: megha@forging.org

FIA MAGAZINE | FEBRUARY 2024 5

WASHINGTON UPDATE

House China Committee Releases Policy Recommendations By Omar S. Nashashibi

When the new 118th U.S. Congress convened in early 2023, the House of Representatives created the Select Committee on the Strategic Competition between the United States and the Chinese Communist Party. The Committee on China, as it is known around Capitol Hill, has held more than a dozen hearings in 2023 on a range of issues from forced labor to Taiwan and emerging technologies. Thirteen Republican and eleven Democratic members of the U.S. House serve on the temporary Select Committee, though members of both parties largely took nonpartisan positions in their approach to policy towards China. The Forging Industry Association worked with members of the Committee over the past year, including with its Chairman, Mike Gallagher (R-WI). FIA continues to press lawmakers to keep pressure on the Biden administration to retain the tariffs on imported Chinese forgings and the Committee continues to play an important role in that effort. This is not a typical Standing Committee or a permanent committee. It does not have the authority to draft and pass legislation that would go to the floor of the U.S. House. The Committee can hold hearings, call witnesses, request information from federal agencies, but it cannot move a bill to the floor. This important distinction has led the Committee to issue a series of reports and recommendations over the past year. The most recent, and most far reaching, is a report released December 12, 2023, containing nearly 150 policy recommendations. Titled, “Reset, Prevent, Build: A Strategy to Win America's Economic Competition with the Chinese Communist Party,” the Committee members moved to adopt the recommendations in the report after several months of deliberation and input.

The report calls for three key pillars: • RESET: Reset the Terms of Our Economic Relationship with the People's Republic of China • PREVENT: Stem the Flow of U.S. Capital and Technology Fueling the People's Republic of China's Military Modernization and Human Rights Abuses • BUILD: Invest in Technological Leadership and Build Collective Economic Resilience in Concert with Allies Among the premises of the report is an issue that is sure to receive the most attention in the coming months – China’s accession to the World Trade Organization and the U.S. Congress in 2000 granting of Permanent Normal Trade Relations Status. While the Committee stopped short of calling for an immediate recission of China’s PNTR status, sources in Washington, D.C. indicate that Committee members held extensive discussion over whether to recommend such an immediate move and its impact on farmers among other sectors. Instead, they recommended a slower implementation rather than immediate withdrawal. Permanent Normal Trade Relations, or PNTR, allows imports from that nation to enter the U.S. either duty-free, at a lower duty rate, or be listed in the Special Column 1 category with a specific low duty rate or no duty applied. When reading the Harmonized Tariff Schedule tables, Column 2 under Rate of Duty currently applies to Belarus, Cuba, North Korea, and Russia which can face tariffs reaching 90%. The Committee’s report says that “Congress should move the People’s Republic of China to a new tariff column,” and that “this shift should be phased in over a relatively short period of time to give our economy the time necessary to adjust without avoidable disruptions.”

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FIA MAGAZINE | FEBRUARY 2024

WASHINGTON UPDATE

Such a move would mark a major change in U.S. trade policy and for the global economy. The Committee is recommending removing China’s PNTR status and thereby moving its imports from Column 1 of the General Duty Rates, not to Column 2 with Belarus, Cuba, North Korea, and Russia, but to its own new category. The Committee does not define what a “relatively short period of time is”, but trade policy experts in Washington expect some discussion in the coming months over stripping China of its PNTR status and imposing duties, despite the odds still being long of Congress taking such an action. Any change in the duty columns is in addition to the Section 301 tariffs of 25% and 7.5% tariffs on over 10,000 Chinese imports. New duties under a change in classification as recommended by the Committee are also in addition to antidumping (AD) and countervailing duties (CVD) imposed by the Commerce Department due to selling at below cost (AD) into the U.S. or illegal foreign government subsidies (CVD). The Committee made a number of other significant recommendations to fellow lawmakers that would impact trade policy, including renewing a trade safeguard provision (Section 421) allowing the U.S. to impose tariffs on China due to threats to cause “market disruptions”. The bipartisan group of lawmakers also called for Congress to pass legislation for a process to negotiate Free Trade Agreements with Taiwan, Japan, and the United Kingdom as a way to help counter China. Were the U.S. to move on new trade agreements, few expect final action prior to the 2024 election. There is discussion of action in 2024 on legislation related to trade that would include provisions addressing China, including legislation supported by FIA, the Leveling the Playing Field 2.0 Act. While the recommendations do not have the force of law, and we are very far away from revoking China’s PNTR status, the China Committee’s bipartisan report marks the first time since 2000 that members of both parties came together to comprehensively examine our competitiveness with China. The FIA will continue working with members of the Committee on their recommendations and legislation to address illegal and anticompetitive behavior by the Chinese Communist Party.

FIA Orders & Shipments Survey

FIA’s Orders & Shipments Survey program was re launched in 2019 as a web-based high-end survey product. The survey’s scope is confidentially tracking FIA member North American shipments and bookings for forged products inclusive of the Impression Die, Open Die and Rolled Ring processes. About the FIA O&S Survey: • FIA partnered with MTInsight, the statistical tracking division of The Association for Manufacturing Technology (AMT), to build a custom analytics program to serve the forging industry. • Categories tracked include OPEN-DIE, CLOSED DIE and ROLLED RING forging as well as markets served, and material used. • Survey takes 30-minutes or less to complete each month • Included reports: • Monthly Index Overview • FIA members enter their monthly orders & shipments data into AMT's custom-built, confidential software system. • As first step members complete their full 2021 sales (in Excel), then gain access to the program for monthly data loading • This is a members-only benefit. Questions? If you would like more information or a Zoom demonstration to walk through the process of working with the software and loading monthly numbers, please contact Jim Warren at jwarren@forging.org. • Market Share Report (Dollars) • Product Report (Index Values) • Profile Report

Omar S. Nashashibi is a founding partner at The Franklin Partnership, LLC, a Washington-D.C. based lobbying firm representing the Forging Industry Association before the federal government. Phone: 202-715-1264 Email: omar@franklinpartnership.com

FIA MAGAZINE | FEBRUARY 2024 7

ENERGY

No Energy Transition Without a Reliable Electric Power Grid By Bernard L. Weinstein

In short, the U.S. electric grid isn’t prepared for the energy transition. Though it’s sometimes described as a vast, synchronized machine — a network of wires carrying electricity from power plants across the country into our homes and businesses — in practice there is no national grid. Moreover, the three regional grids have few interconnections and therefore share little power. The regional grids are further divided into numerous independent system operators, posing challenges to building long-distance power lines that can move renewable electrons across the country. The electrification of the economy faces many other obstacles. In recent years, the costs of utility products, including transformers, insulators and poles, have risen at two-and-a-half times the overall inflation rate. Furthermore, a backlash has been building against large-scale wind and solar projects, especially as they move closer to populated areas. And America faces a dire shortage of electrical engineers and electricians, critical players in realizing a successful energy transition. Finally, there are dozens of industries that will be virtually impossible to electrify, such as blast furnaces, cement kilns and petrochemical plants. The acceleration of coal and nuclear plant closures is also retarding the energy transition as more base-load power is removed from the grid. Maybe we’ll see a nuclear renaissance down the road; but of the nearly $3 trillion being spent by the Biden administration on its clean energy push, only chump change is allocated to nuclear power. As much of America suffers under a heat dome that may last the rest of the summer, we need to take a hard look at the energy transition and acknowledge that not only will the road be long and expensive but fossil fuels will remain an important energy source in the future, even if we achieve the goal of net-zero carbon emissions.

July 2023 was the hottest month on record, both for the United States and the entire planet. What is more, according to climatologists, we’re likely to witness elevated average temperatures for the foreseeable future. Surprisingly, the three American power grids — the Eastern Interconnect, the Western Interconnect, and Texas’s ERCOT — have held up remarkably well, with virtually no brownouts or blackouts so far (except for catastrophic weather events like floods and tornadoes). Huge investments in wind, solar, and industrial scale battery farms over the past decade have proven their worth by helping to keep the lights on and the nation’s air conditioners humming. Today, about 25% of power generation nationwide comes from renewable sources, with some states, like Texas, boasting even higher percentages. But the recent and projected growth in renewable energy sources should not make us complacent. The much talked about “energy transition” is really about the electrification of the American economy. Getting there will require at least a doubling of power generation from today’s level of 4,300 terawatt hours. But without major improvements to the nation’s transmission and distribution networks, this investment simply won’t take place. The sorry state of America’s power grids has been well documented. Didi Caldwell, president of Global Location Strategies, recently observed that “The North American electrical grid is aging, inefficient, increasingly unreliable and polluting. It is also ill prepared to support future electric vehicle demands as well as the large number of industrial facilities projected to be built in the next decade and the rapid development of distributed, renewable generation.” Modernizing the grid won’t come cheap. Estimates of the cost to upgrade America’s power grids to meet anticipated demand 30 years from now range as high as $7 trillion. Yet federal and state regulators approved less than $500 million in grid upgrades last year. The Biden administration’s $2.3 billion grant program to the states for grid improvements, announced last year, doesn’t amount to much.

Bernard L. Weinstein is an emeritus professor of applied economics at the University of North Texas, retired associate director of the Maguire Energy Institute at Southern Methodist University, and a fellow of Goodenough College, London.

Reprinted with permission from The Messenger, July 2023 (www. themessenger.com) Source: https://themessenger.com/opinion/no-energy-transition without-a-reliable-electric-power-grid

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FIA MAGAZINE | FEBRUARY 2024

ENERGY

Navigating Energy Markets: Unveiling Insights from the Natural Gas 12-Month Strip By Nancy Gardner

In our latest whitepaper, Transparent Energy focuses on the NYMEX 12-month forward strip as an essential tool for understanding the trajectory of natural gas prices (and, by extension, electricity prices) and as a compass for guiding energy buyers’ decisions throughout the year. From the influence of record high U.S. natural gas production to strategic shifts in European gas dynamics, this whitepaper explores the intricacies that shape the future market for energy. Using January 2024 as the prompt month, this report dissects the factors influencing the recently settled price of $2.561 per MMBtu and puts this price into historical context. Delve into the data, charts, and insights to gain a nuanced understanding of natural gas market drivers, the potential for significant (upside) price fluctuations ahead, and, most importantly, what actions you can take now to affordably power your business. The 12-Month Strip One of the most common ways to evaluate current natural gas prices is to look at the NYMEX 12-month forward strip. The 12-month strip provides a snapshot of where prices are trading for the next calendar year. With January 2024 serving as the prompt month, the current 12-month strip represents an average of the next twelve traded natural gas contracts (January 2024–December 2024). Because January is the prompt month (and is also the first month of the calendar year), the 12-month strip can also be referred to as Cal ’24, or Calendar Year 2024. Once February 2024 is the prompt month, February 2024-December 2024 will be referred to as Bal ’24 (or Balance of Year 2024), and the 12-month strip would then be February 2024-January 2025. In addition to the 12-month strip, energy buyers often look at 24-month and 36-month natural gas strips, as well as longer terms. Frequently, we look far into the future at Cal ’25, Cal ’26, etc., and out past Cal ’30. What the Current 12-Month Strip Shows As indicated in Figure 1, the NYMEX Natural Gas 12-month strip recently settled at $2.561 per MMBtu.

Figure 1: NYMEX Natural Gas Settlement Prices on Monday, December 11th, 2023

The $2.561 settlement price is significant because it marks the lowest level we’ve seen for the 12-month strip since December 28th, 2020. Additionally: • Cal ’25 (now trading at $3.377) is at its lowest level since March 2, 2022. • Cal ’26 (now trading at $3.645) is at its lowest level since March 28, 2022. • Forward strips out to 2030 are all trading at or close to multi year lows. If we look at Figure 2 below, the average NYMEX settlement price over the past 10 years is $3.366 per MMBtu. The current 12-month strip price of $2.561 is lower than eight of the past 10 years.

Figure 2: NYMEX Natural Gas Annual Average Settlement Price Note: The highlighted numbers above indicate years when the annual average NYMEX Natural Gas price settled above today’s $2.561 per MMBtu forward strip for 12-months.

FIA MAGAZINE | FEBRUARY 2024 9

ENERGY

Why Have Natural Gas Prices Dropped? • The 2022-2023 winter (December through February) was the fourth warmest winter on record. The mean temperature was 34.0°F, which was 6.5 degrees above the 130-year average and 4.3°F warmer than the 30-year average. This led to a sharp drop in residential and commercial demand for natural gas. • U.S. natural gas production established new record highs in 2023. After averaging 99.6 Bcf per day in 2022, production is expected to exceed 104 Bcf per day in 2023 and rise to more than 105 Bcf per day in 2024. • As a result of lower res/com demand for natural gas and the increase in domestic production, U.S. natural gas inventories rose from a deficit of 367 Bcf vs. the 5-year average in August 2022 to a surplus of 378 Bcf by March 2023. • European natural gas prices dropped from a high of more than $90 per MMBtu in August 2022 to below $12 per MMBtu in December 2023. The decline in prices was the result of a warm winter across the continent and lower demand across the industrial and res/com sectors. Storage inventories are nearly full entering the winter of 2023/2024 as European countries have effectively weened themselves off the need for Russian pipeline gas. (See Figure 3 below for a historical look at Dutch TTF prices, the benchmark for European natural gas). • ExxonMobile announced a delay in the startup of its Golden Pass LNG export terminal along the Gulf Coast. This facility was expected to begin exporting 2.4 Bcf/d beginning in the second half of 2024. The start date has been pushed back to the first half of 2025. This 6-month delay is expected to add nearly 200 Bcf of unexpected gas to storage. • The winter of 2023-2024 is off to a slow start, with warmer than-normal temperatures expected for the majority of December. Looking ahead to the rest of the winter, an El Nino pattern is emerging, which is typically associated with warmer, dryer conditions across the northern two-thirds of the continental U.S.

Is Now an Ideal Time to Procure My Next Electricity or Natural Gas Contract? Yes! While market fundamentals continue to show signs of bearishness, the potential for prices to move substantially higher outweighs the limited opportunity to the downside. As we advised clients for most of the 2010s and into the 2020s, “You Won’t Get Hurt Falling out the Basement Window.” We do not know how much lower prices can go, but we know that at current price levels, natural gas producers find less incentive to maximize production. One reason to expect natural gas prices to revert higher is that state and federal governments are enacting greenhouse gas emission reduction targets. These clean energy standards are changing the dynamics of electricity pricing while also helping to foster all-time demand for natural gas in the power generation sector. Coal-fired capacity is being retired at an average rate of more than 11 GW per year since 2015. In 2005, coal accounted for 50% of all electricity generated in the U.S. That number today is below 19%. Figure 4 below shows planned electric generation retirements over the next several years.

Figure 4: Planned U.S. Electric Power Plant Retirements Despite the delayed start of the Golden Pass LNG export terminal, several other facilities are in various phases of construction and preparing to send liquified natural gas to foreign markets (particularly Europe and Asia). Figure 5 below shows the planned timeline, which will nearly double U.S. LNG export capacity by the end of 2026.

Figure 5: Planned LNG Export Capacity Growth

Figure 3: Dutch TTF Front Month Natural Gas Prices

FIA MAGAZINE | FEBRUARY 2024 10

ENERGY

Every Bcf of natural gas that is sent overseas is a Bcf that does not get injected into U.S. storage reserves. As we saw as recently as the summer of 2022, a deficit in natural gas storage vs. prior years leads to higher prices. Figure 6 below demonstrates this inverse correlation.

Figure 7 below shows the 12- and 24-month natural gas price strips over the past 3 years. Gas costs have reverted to near the historic lows of the prior decade.

Figure 7: 12 and 24-Month Natural Gas Price Strips ($/MMBtu) The key takeaway is that natural gas prices are approaching all-time lows. While much of the downward movement has been focused on the front of the curve, there have also been significant decreases in pricing for 2025-2030. The market is presenting an opportunity to secure low-cost, fixed-price energy several years into the future. Nancy Gardner VP, Channel Partners & Associations Transparent Energy Phone: 732-288-5126 Email: ngardner@transparentedge.com

Figure 6: U.S. NG Storage Deficit/Surplus vs. 5-Year Avg. as Compared to NG Prompt Month Price Today offers a near-perfect storm of low-cost energy conditions: • Mild winter weather. • Strong natural gas production. • Lower prices overseas. Conditions that could send prices substantially higher: • Any extended period of below-normal temperatures, especially in large population centers. • Continued or expanded efforts to eliminate fossil fuel electric generation. • LNG export capacity meeting or exceeding planned growth trajectory. • Economic turnaround in European and/or Asian markets. While there are certainly factors that could move prices in either direction, we believe that the risk to the upside is much greater than the opportunity cost to the downside. Just last year, prompt-month prices settled at $9.353 per MMBtu in September 2022. That is more than 4x current prompt month prices.

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EQUIPMENT & TECHNOLOGY

Flexibility and Productivity: The New FICEP Precision Forging Line By Carlo Maffei

The forging industry has reached a new level of flexibility and versatility with the introduction of the revolutionary Precision Forging production line developed by FICEP . This advanced production system was specially designed for a major automotive customer, which manufactures heavy-duty truck components in-house. The line offers a wide range of process combinations for the production of gears with forged teeth of various sizes and complexities. Since forging automotive components demand continual advanced and flexible technologies: FICEP is redefining the future of flexible forging with this new line. Flexibility = Productivity Flexibility is synonymous with productivity, the key to efficient and optimized production that fits every need. The precision forging of gears and other automotive components requires highly sophisticated presses and state-of-the-art technologies that can guarantee high-level performance, both from a tolerance and

productivity standpoint. Integrated in are FICEP’s robotic systems providing flow automation, in a variety of configurations meeting a wide range of manufacturing needs. A Single Line with Multiple Operating Combinations The line can handle different operating combinations, allowing a wide range of finished parts. In the basic version, there are five operating combinations (expandable to seven), revolutionizing the traditional approach based on separate production lines for each type of part. Instead of following the conventional route, this line allows parts to enter at any point, as different sections can work independently. The result is a significant reduction in costs and a significant optimization of production efficiency , all thanks to the outstanding flexibility of this production line. Instead of relying on multiple lines, following a standard industrial model, in this case we have a single line that can handle all aspects of the production process .

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EQUIPMENT & TECHNOLOGY

The FICEP line makes it possible to produce a complex part that needs the full cycle preforming and stamping or to forge two very different parts at the same time . To enable this optimization, the robotic systems play a key role in loading & unloading, operating in a harmonized and integrated manner with the other systems on the line. Perfect Combination The essential aspect of this new line installed by FICEP is the synergy between the custom configuration tailored to the specific needs of the customer and the harmonized integration of robotic automation . This combination generates concrete benefits for the customer who has access to increased productivity, adaptive capabilities and greater precision. The preliminary stage of the line involves a high-performance S-series disc saw from FICEP . This type of sawing machine is characterized by a particularly strong and rigid construction that guarantees speed, precision, cutting quality and reduced scrap. The cutting line also includes weighing, control, and grading functions. The billets produced by the sawing machine are graded and distributed in different bins. The entire production line is controlled by a central system, which generates labels with QR codes showing all the product data, quantity and weight of the piece in the bin. Throughout the process, QR codes enable monitoring and quality control , ensuring the overall efficiency and accuracy of the production line. A Complete System Downstream from the main furnace, the production cycle includes two 6-axis robots from the RF series capable of meeting any handling requirements during all phases of the molding cycle. One robot retrieves the part and transfers it to a hydraulic press model HF 2000 . This press is designed with a dual station, one side and one center, to perform dual operations. Although not always necessary, in the case of hot molded parts, the initial operation involves scorifying the oxidized billet to remove any slag that might contaminate the mold. Next, the same robot transfers the part to the second central mold, where it can undergo both molding and pre-forming. The introduction of a second robot marks the next step in the process. This robot retrieves the part from the first or second station and moves it to FICEP’s Direct Drive DD 270 screw press deputed to shaping and stamping operations. FICEP’s Direct Drive DD 270 press is distinguished by: • Increased impact speed and thus reduced die wear. • Significant reduction in cycle time, thus enabling higher productivity. • Very high efficiency that under certain conditions allows electricity savings of more than 50 percent. More energy available and totally achievable as early as three-quarters of the ram stroke.

• Programmable energy with absolute precision and repeatability for both single and multiple strokes with different energy values. • Simplified maintenance. After forging, a third robot retrieves the part from the DD 270 and places it on the HF 400 hydraulic press , which has a capacity of 400 tons. This particular press is used exclusively for one or two operations, such as blanking the outer flash and removing the inner bottom on larger parts. This complete process constitutes the first part of the plant’s operations: pre-forming, forging and trimming. Downstream from the forging line we find the calibration process of both cold and hot molded parts , which previously undergoes a normalization step in an oven. This normalization is necessary to eliminate any stresses within the material after forging. This process also causes oxidation of the part, which must be removed by sandblasting. Although sandblasting compromises the surface to some extent, it is essential to remove this oxidation before final calibration. The parts are then taken to a dedicated area, where another HF 2000 hydraulic press -similar to the previous one, is used to cold calibrate the parts . The purpose of this calibration process is twofold: to obtain the correct surface roughness of the teeth and to restore all the tolerances expected for the part. This area consists, in addition to the HF 2000, of two 6-axis robots from the RF series deputed to loading and unloading parts in the press: the robot deputed to loading is equipped with a 3D vision system that allows it to be positioned correctly in the mold. A third RF robot goes in for special mist lubrication to improve material micro-slides during calibration. FICEP’s new Precision Forging line represents an important milestone in the forging industry, bringing with it an extraordinary combination of flexibility and productivity. This innovative custom line, designed for a leading automotive customer, has proven that flexibility is the key to efficient and optimized production that can adapt to any requirement. Carlo Maffei Commercial Director Forging Division FICEP S.p.A Email: carlo.maffei@ficep.it

FIA MAGAZINE | FEBRUARY 2024 13

EQUIPMENT & TECHNOLOGY

Digital Engineering: Pushing the Boundaries of Innovation with Simulation By Nicolas Poulain

Executive Summary As a process engineer, you face continuous pressure to optimize manufacturing processes and increase efficiency in an increasingly competitive market. To stay ahead of the competition, you need innovative tools that can help you improve the quality of forged parts and reduce energy usage and costs. One tool that can help you achieve these goals is simulation software. Recent advancements in computing software and hardware have made simulation more powerful and accessible than ever before. With modern simulation software, you can accurately simulate the entire manufacturing process, from billet heating to final operations, with greater efficiency and precision. Simulation provides you with a deeper understanding of the forging process and the quality of the forged part than ever before. Real

time simulation enables you to quickly see the impact of modifications on the part’s quality and the process’s efficiency. Even small modifications can significantly reduce costs, increase tool life, and speed up processing times for forged parts. By leveraging simulation software, you can significantly increase the speed to market, optimize processes, and stay ahead of the competition. Simulation makes all of these benefits available without the need to forge a single part, giving you greater insight and understanding without wasting material or energy. “Increased fuel and energy costs directly impact the cost of producing forged parts. These rising costs, coupled with a desire to increase energy efficiency and low carbon production, give forgers even more reason to understand how energy is used in your process and where the process can

be optimized. This is why forgers with simulation software in their toolbox have a strategic advantage over traditional forgers.” Forging: Shortcomings of the Traditional Process The traditional forging process is not known for being fast-moving or innovative. Starting with a nearly finished design, forgers will typically perform multiple trials on the part, iterating after each step. To get the part to market quicker, forgers with experience producing similar parts are required to lend their expertise, saving some iterations.

Resource Waste

Delayed Time-To-Market Reduced Product Quality

Traditional forging typically requires multiple iterations to optimize the temperature, pressure, and die design to produce a high-quality forged part. During each iteration, a significant number of resources, including raw materials, energy, and labor, are used. This process can be costly, not only in terms of resources but also in terms of time and lost rev enue due to delayed time-to market.

The traditional forging process can lead to delays in getting a product to market because it takes time to produce each batch of parts, inspect them, and make adjustments to mitigate defects. Adjustments made during each iteration may not always result in an improvement in product quality, resulting in wasted time and resources. This delay can result in missed opportunities, lost revenue, and increased costs, all of which can have a significant impact on the profitability of the manufacturing process.

Traditional forging processes can sometimes result in reduced product quality due to factors such as incorrect temperature control, tool wear, and inadequate process monitoring. Incorrect temperature control can lead to uneven deformation and cause material defects inaccurate part dimensions and surface imperfections. Additionally, inadequate process monitoring can cause variations in the final product’s mechanical properties. such as cracks, while tool wear can result in

Figure 1

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EQUIPMENT & TECHNOLOGY

Figure 3: Bent Billet from Roller bend

Figure 2

A New Tool in the Toolbox Embracing change and utilizing simulation is critical for forgers looking to stay competitive, even in the face of significant headwinds. Simulation allows for the optimization of the traditionally expensive forging process in a risk-free digital environment rather than on the shop floor. This not only saves costs, but also allows for more value to be added to the product, which can increase margins and attract customers. Simulation is a powerful tool that allows for the validation of forged parts, both in the design phase and for parts already in production. By modeling the entire forging process, simulation provides deeper insights into the process and the part, enabling the prediction of many different forging characteristics. With a validated model, all key parameters of the forging process and the part can be understood and modified to improve desired characteristics. This validated model is a powerful asset for forgers, setting them apart in the market and allowing them to bring more value to the table for customers during the design phase. Design of Bend Tooling – A Case Study Challenge: Design of Bend Tooling Solution: Export an STL file to overlay the "U" shape onto our forge dies in CAD, ensuring that the bent shape would be compatible with the desired specifications for this particular part.

The Company Anchor Harvey is a data-driven aluminum forging company with a century-long legacy in precision manufacturing, engineering, and supply chain management in the USA. We’ve modernized the age-old aluminum forging process by introducing sophisticated technology to monitor and control every step of the process, ensuring part consistency from 1 to +1,000,000. Challenge Hot bending a 2.375 diameter 6061 aluminum billet into a "U" shape presents numerous challenges. The process involves critical factors such as temperature control, bending method, bending equipment, bend radius and angle, heat distribution, post-bending treatment, and quality control. Attaining the desired shape necessitates careful consideration of these factors. However, this type of bender can cause galling on the outer surface of the aluminum billet, leading to flaws on the parts. Various coatings have been attempted on the original bender to reduce friction, but they have had limited effect on the billet's surface. Lubricating the roller bender before each hit is done to help prevent galling. Furthermore, the design of the bend tooling poses a specific challenge. The bend tooling must be meticulously engineered to ensure that the resulting bent shape aligns with the requirements of the intended part.

Figure 4: Earlier bender bottom die

The Solution Thanks to the bending simulation, we were able to initiate the design of the bending tooling for our project. We utilized the simulation results to start developing our bending tooling by exporting an STL file. This allowed us to overlay the "U" shape onto our forge dies in CAD, ensuring that the bent shape would be compatible with the desired specifications for this part. The team at Transvalor Americas helped us reduce simulation time by over 50%, which has made a significant difference in our business's workflow and process. This has allowed us to avoid press downtime due to sampling and increased quotation accuracy, resulting in significant cost savings. Additionally, the software's ability to identify flaws during simulation has helped our engineering team determine the necessary forming steps, and all hot forming tooling is validated and tested in simulation before being released for manufacturing. This has reduced the likelihood of significant flaws in the released tooling and

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