AS6279 – What You Need to Know

On October 15, 2015, a new specification called AS6279, “Standard Practice for Production, Distribution, and Procurement of Metal Stock” went into effect. AS6279 adds several new responsibilities related to chain of custody, traceability, certifications, record retention, product substitutions, and dimensional limits.

If you supply or purchase materials to specifications such as AMS 4900, AMS 4901, AMS 4911, AMS 4919, AMS 4928, AMS 4930, AMS 4965, AMS 4967, AMS 4971, AMS 4978, AMS 6930, AMS 6931, AMS 6932, AMS 6936, you are affected. Additional specifications will begin to incorporate AS6279 as they are revised.

AS9100/AS9120 Certification: Perhaps the most significant requirement is that producers and distributors of titanium being sold to the above specifications, must be accredited to AS9100 or AS9120, unless otherwise approved by the cognizant engineering organization.

Definition of “Producer”: AS6279 establishes that any organization can become a “Producer” by coordinating manufacturing operations, even if that organization does not perform any processes in-house. An organization authorizing processes that change material gauge, condition, or specification, is a Producer. Producers are responsible for ensuring that material meets all specification requirements for the new dimension, condition, or specification. Producers are required to identify themselves and provide information about manufactured products to MMPDS (Metallic Materials Properties Development and Standardization), which is used to analyze design allowables for aerospace structural designs.

Product Substitutions: It is not appropriate to substitute product forms without authorization from the cognizant engineering organization. Plate and flat bar may look similar, but the inherent product characteristics are different. Organizations must also ensure the thickness or Short Transverse dimension is not cut to achieve desired thickness, without authorization from the cognizant engineering organization.

Chemical Milling: Chemical milling or pickling shall only be used for alpha case removal or pre-penetrant etch, unless approved by cognizant engineering organization.

Ordering Information: Aside from standard ordering information, purchasers must ensure that any relevant requirements are flowed down from the cognizant engineering organization. Include requirements for grain direction, as well as maximum allowable gauge. When the size being ordered exceeds the range covered by the AMS specification, purchasers must flow down any mechanical property requirements or supplemental tests that must be satisfied.

Free introductory training presentations are available at: http://www.sae.org/servlets/works/committeeHome.do?comtID=TEAAMSMGC

AS6279 is available for purchase through SAE International: http://standards.sae.org/as6279/

Berkshire Hathaway to buy Precision Castparts for…. $37,200,000,000

This week, Berkshire Hathaway revealed plans to acquire Precision Castparts Corp (PCC) for a whopping $37.2 billion, amounting to Warren Buffett’s largest deal in history. PCC is a Portland, Oregon-based aerospace supplier, manufacturing various complex structural airframe components and other parts for the aerospace and oil and gas markets.

PCC’s organization is comprised of companies dealing in Investment Cast Products, Airframe Products, and Forged Products, including Wyman-Gordon, Special Metals Corp, and Titanium Metals Corp (TIMET). PCC famously purchased TIMET, a major domestic source of titanium mill products, in 2013 for $2.9 billion.

This deal comes off the heels of the $1.5 billion consolidation of Alcoa and Pittsburgh-based RTI International Metals, a global manufacturer of titanium specialty metal products.

Check out highlights from the press release below, or view the full press release here.

Berkshire Hathaway Inc. to Acquire Precision Castparts Corp. for $235 Per Share in Cash

PCC will remain headquartered in Portland, Ore. as a wholly owned subsidiary of Berkshire Hathaway


OMAHA, Neb. & PORTLAND, Ore. – Aug. 10, 2015 – The boards of directors of Berkshire Hathaway Inc. (NYSE: BRK.A; BRK.B) and Precision Castparts Corp. (“PCC”) (NYSE: PCP) have unanimously approved a definitive agreement for Berkshire Hathaway to acquire, for $235 per share in cash, all outstanding PCC shares. The transaction is valued at approximately $37.2 billion, including outstanding PCC net debt.

“I’ve admired PCC’s operation for a long time. For good reasons, it is the supplier of choice for the world’s aerospace industry, one of the largest sources of American exports. Berkshire’s Board of Directors is proud that PCC will be joining Berkshire,” said Warren E. Buffett, Berkshire Hathaway chairman and chief executive officer.

“We are very pleased to be joining forces with Berkshire Hathaway,” said Mark Donegan, PCC’s chairman and chief executive officer. “We see a unique alignment between Warren’s management and investment philosophy and how we manage PCC for the long-term. We believe that as part of Berkshire Hathaway, PCC will be exceptionally well-positioned to support our customers’ needs into the future. This transaction offers compelling and immediate value for our shareholders, and allows PCC’s employees to continue to operate in the same manner that has generated many years of exceptional service and performance to our customers.”

The transaction requires approval by a majority of PCC’s outstanding shares. Closing is expected to occur during the first quarter of calendar 2016, subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Act and competition clearance in certain foreign jurisdictions.

PCC will continue to do business around the world under the Precision Castparts name and maintain its headquarters in Portland, Oregon.

Slight drop in Q2 ATI Surcharge

The second quarter is upon us, and ATI Specialty Materials has published new titanium surcharges. However, nothing to write home about.

ATI’s RMS (raw material surcharge) is published quarterly, and fluctuates based on critical elements used in the melting of products.

ATI 6AL-4V and 6AL-4V ELI Bar and Plate Surcharges dropped to $5.15/lb, down a whopping 3 cents from the prior quarter.

CP Grades 2 and 4 remained stable at $3.70/lb for Bar and Plate.

ATI Surcharge Holds Steady

The first of the year brought a newly published quarterly titanium surcharge from ATI, with no significant changes.
The 6AL-4V titanium bar and flat products surcharges dropped a penny from last quarter, to $5.18/lb. The 6AL-4V ELI surcharge followed suit, listing at $5.18/lb.

Commercially Pure Grades 2 and 4 held firm from fourth quarter 2014, at $3.70/lb for bar and flat products.

Though surcharges remain flat, lead times have greatly extended at various domestic titanium mills. Small diameter products may require 30+ weeks lead time, while larger diameters and plates are running 14-22 weeks.

ATI Raises Titanium Surcharge for 6AL-4V

ATI Allvac has marginally increased its raw material surcharge for 6AL-4V titanium products.

Surcharge changes are currently released on a quarterly basis.  The fourth quarter surcharge on 6AL-4V titanium bar products is $5.19/lb, up from $4.98/lb for the third quarter. The surcharge has been creeping upwards since the second quarter of 2014, when it charted its first increase in two years.

The Commercially Pure Grade 2 surcharge remained flat at $3.70/lb for bar and flat products.

PERFORMANCE TITANIUM GROUP: A CUT ABOVE THE REST