Global boom shipments to reach 83 million tons in '07: aluminum and ductile iron lead the charge as 8.5% global growth is forecast from 2003 to 2007.

The globalization of the metalcasting industry has been well reported throughout the pages of MODERN CASTING. However, the extent of this phenomenon isn't truly understood until the numbers are analyzed.

As shown in Figure 1, 54% of global metal casting shipments are manufactured in China, Western Europe and the U.S. Worldwide metal casting shipments are expected to rise from 76 million in 2003 to 83 million in 2007.

Fig. 1. This chart
illustrates the forecast of
metal casting shipments
by region in 2007 in
millions of metric tons.

China             21.9
Western Europe    17.0
United States     13.6
Japan              7.0
Russia             6.8
India              4.2
Eastern Europe     3.0
Brazil             2.4
Korea              2.1
Mexico             2.0
Canada             1.0
Other             18.9

Note: Table made from pie chart.

This article details an analysis of the production of gray iron, ductile iron and aluminum castings in Europe and other major industrial regions to determine their effect on the world casting market place.

Western Europe--Automotive

In order to forecast casting markets in Europe, Stratecasts Inc. analyzed the production of cars and commercial vehicles in Western Europe and forecasts annual production by country to 2007.

Passenger car production in Western Europe is expected to increase at a rate of 1.6% per year from 15,282,000 vehicles produced in 2003 to 16,283,000 vehicles in 2007.

Light truck production is to see gains in the late 2000's as sport utility vehicles and van sales pick up and spur commercial vehicle gains. It is forecast that commercial vehicle production is to increase 5.0% annually from 2,421,000 vehicles in 2003 to 2,945,000 vehicles in 2007. The light truck production is expected to rise to 17% of the total light vehicles and reach 3.1 million vehicles by 2007. It should be noted that the "light truck" classification is not only included in the "commercial vehicle" group but also is a part in the "passenger car" classification.

Germany, France and Spain continue to lead in motor vehicle production. Italy is expected to rebound from recent lows and reach 1.6 million vehicles in 2007.

Despite the forecasted growth in motor vehicle production, gray iron consumption in motor vehicles is forecasted to decline at a rate of 0.7% annually from 2.2 million tons in 2002 to 2.0 million in 2007 because of the continued conversion from iron to aluminum and plastics. Aluminum cylinder head production is now more than 90% while the aluminum share of engine blocks is more than 50% and expected to grow to 70% by 2007.

Ductile iron is forecast to grow 1.4% per year despite some conversion in suspension castings to aluminum. The motor vehicle sector consumes a large amount of ductile iron in such applications as exhaust manifolds, calipers, knuckles, differential carriers and cases, wheel supports, yokes, anchors, gears, plates, brackets, couplings, shafts, truck beams, sprockets, steering gear housings and control arms.

Aluminum automotive castings made in Western Europe are approximately 70% of the total aluminum castings shipped and are expected to rise to 2.0 million tons in 2007, an increase of 300,000 tons over 2002.

Following is a look at casting production in each country.

Germany

The shipment of castings by German foundries is primarily dependent on the domestic automotive industry coupled with exports. German vehicle production declined to 5.14 million units in 2002 and increased to 5.5 million units in 2003. Production in 2004 is expected to be near 2003 levels followed by an increase in subsequent years, reaching 5.8 million vehicles in 2007. The weight of iron castings per vehicle is expected to drop. This factor, combined with lower exports, is expected to lower the shipments of both gray and ductile iron, as shown in Tables 2 and 4.

Aluminum casting shipments continue to grow with auto production and are forecast to rise to 768,000 tons in 2007, a growth of 100,000 tons over 2003.

The high cost of metal scrap and pig iron as well as the strong Euro continue to reduce profit margins for foundries, causing some reduction in the number of foundries.

United Kingdom

The casting market in the U.K. peaked in 1998 and 1999 as exports increased. As the economy recessed in 2000, exports dropped off drastically, reducing gray and ductile iron shipments to the lowest levels in 10 years.

Though vehicle production is expected to reach mid-90 levels by 2007, the demand for iron castings as shown in Tables 3 and 5 are expected to remain low compared to 1998 and 1999 levels. Aluminum casting shipments are expected to rise to new highs greater than 200,000 tons, as shown in Table 6.

The currency exchange rate remained relatively strong against the Euro thus weakening the U.K. foundry competitiveness in the Western European market place. The strength of pound against the dollar has also curbed exports to the U.S.

Italy

Italy's economy slowed in 2001, 2002 and 2003 and is not expected to rise significantly until mid 2005. The GDP is forecast to rise in 2005 to 1.5% as unemployment drops to 9.1%.

The foundry industry has suffered in the past 20 years with the number of foundries dropping from 700 to 280. Gray iron casting shipments declined to 922,000 tons in 2003 and remained down in 2004 at 910,000 tons. A continued drop is expected in the next few years, stabilizing at 900,000 tons in 2007. Ductile iron tonnage increased to 445,000 tons, an all time high in 2003.

Aluminum casting shipments are forecast to grow to 840,000 tons in 2005 and to 880,000 tons annually by 2007. Ductile iron is to grow at an annual rate of 1.4% as the automotive industry recovers. The automotive sector is very protective and is primarily supplied by Italian made castings. However, the continued strength of the Euro is expected to keep domestic foundries non-competitive in the export picture.

France

After growing strongly in 2000, the French economy slowed in early 2001, and continued down in 2002, 2003, and 2004. Recovery signs are expected in 2005.

Gray iron casting shipments continue to drop and are forecast to decline to 1,035,000 tons in 2005 and to a low of 940,000 tons in 2007. Ductile iron shipments, spurred by the dominance of Pont-a-Mousson in the pipe market, is forecast to stabilize at 1.2 million tons per year.

Aluminum casting shipments are expected to rise to 400,000 tons in 2007 from 365,000 in 2002. Die castings represent 60% of this tonnage.

Spain

GDP growth in Spain (one of the highest in Europe) is expected to reach 3.0% in 2005, despite the loss of exports caused by the strong Euro.

The Spanish automotive industry (the largest user of domestic made castings) continues to expand. Total vehicle production is forecast to increase from 2.8 million units of peak production in 1998 to 3.4 million units in 2007. Gray iron casting shipments are forecast to decline 2.0% per year as conversions to aluminum continues. Ductile iron is expected to grow at an annual rate of 1.8% and peak at 723,000 tons. Aluminum castings are forecast to rise to 310,000 tons in 2007, an increase of 50,000 tons in 5 years.

Spain continues to be the largest casting export nation in the European Union with a 160% ratio of shipments to demand.

Western Europe--Non-Automotive Markets

Municipal & Building Construction

Based on an expected increase in housing starts, it is forecast that a slight increase from 802,000 tons in Western Europe in 2002 to 845,000 tons in 2007 is to take place, as shown in Table 3. A continued loss to imports from Eastern Europe is probable along with conversions to ductile iron. Ductile iron usage is now estimated to be more than 20% in Western Europe.

Pipe

The present production of ductile iron pressure pipe is 1,591,000 tons (Table 5) and is forecast to grow to 1,622,000 tons by 2007 despite losses to PVC pipe and reduction of exports due to currency problems.

Machine Tool and Plant Engineering

As shown in Table 3, the total Western European gray iron shipments in this category are forecast to grow from 1,224,000 tons in 2002 to 1,401,000 tons in 2007. The annual five-year rate of growth is 2.7%.

Construction

It is reported that 494,000 tons of ductile iron was consumed in construction machinery in 2002. It is forecast that ductile iron usage will grow in the short term to 525,000 tons in 2007.

EASTERN EUROPE

Following is a look at the forecast across all markets for the major Eastern European countries.

Poland

As shown in Table 7, gray iron shipments from Polish foundries are forecast to increase from 389,000 tons in 2002 to 450,000 tons in 2007. Ductile iron shipments are expected to rise from 102,000 tons to 143,000 tons in 2007. The biggest market for gray iron is in machinery and in municipal casting applications while ductile iron is primarily used for automotive parts. Ductile iron municipal and construction casting applications continue to grow. Approximately 40% of the production of iron castings are exported.

Czech Republic

The Republic foundries are exporting more than 50% of their shipments of iron castings and more than 60% of aluminum. It is forecast that gray iron casting shipments are to grow from 247,000 tons in 2002 to 360,000 tons in 2007.

Ductile iron shipments are expected to increase from 42,000 tons to 70,000 tons in the same period.

Hungary

Aluminum casting production has greatly increased in the last 5 years while gray and ductile are down to lows and are expected not to grow appreciably in the next few years. Gray iron is only forecast to grow from 50,000 tons to 70,000 tons, while ductile iron increases to 30,000 tons are expected primarily for sanitary, municipal, and construction uses. One major foundry is expected to produce larger quantities of ductile iron on high production molding equipment.

Romania

Though the market for castings for the steel industry has markedly decreased in the past few years, the iron casting industry has rebounded and is expected to be strong in the future. Automotive and pipe applications are expected to bring ductile iron tonnage up to the 50,000 level, while automotive applications are to spur growth to 300,000 tons in 2007.

Russia

Gray iron shipments are expected to continue down as shown in Table 8 while ductile iron and aluminum grow to new high levels.

ASIA

Asia remains a high growth region in economic terms, with positive demand prospects for casting usage in automotive applications. In China and India, the focus is on small low-cost cars able to satisfy rising car ownership aspirations.

Car production in India could more than double to more than a 0.5 million units in the next 5 years. China's new vehicle production increased 37% in 2002 and is expected to rise 20% per year by 2007. Korea continues to add capacity and will grow in the export market. The following is a summary of casting demand and shipments by individual Asiatic countries.

Japan

As shown in Table 9, gray iron casting shipments are forecast to increase from 2,351,000 tons in 2002 to 2,405,000 tons in 2007, despite the expected automotive usage drop of 100,000 tons. Ductile iron shipments are forecast to rise from 1.7 million tons to 2.15 million spurred by large increase in pipe and automotive usage.

Aluminum casting consumption is forecast to continue to rise. Aluminum die casting production is forecast to rise from 792,000 tons in 2002 to 1.0 million tons in 2006. Aluminum permanent mold and sand production is also expected to rise significantly from 425,000 tons to 528,000 tons in 2006 spurred by increases in automotive applications.

China

As shown in Table 11 and 12, casting shipments from China are rising significantly each year. The total metal casting shipments in China are now expected to rise to 21.9 million tons in 2007, which is 26% of the total world tonnage.

Exports of castings are forecast to reach 2.8 million tons in 2005. Exports to the U.S. forecast at 710,000 tons, equating to 24% of total cast imports.

Korea

As shown in Table 13, gray iron and ductile iron continue to grow and are forecast to hit new peak levels in 2007. Aluminum is expected to double in the next 5 years. It is forecast that Korea will export approximately 180,000 tons of castings to the US in 2005

India

Exports from Indian foundries to the US are estimated at 251,000 tons with the great majority in iron municipal castings. Anti dumping tariffs have been imposed on Indian casting shipments. Table 14 indicates the continuing growth of casting shipments from India.

OTHER NORTH & SOUTH AMERICA

Brazil

Casting imports to the U.S. are forecast at 235,000 tons in 2005. The country has approximately 1,000 facilities and a capacity of 2.2 million tons. In gray and ductile iron casting production, 46% are for automotive and in aluminum production 65% are for automotive.

In order for the metalcasting industry to meet future shipments demands, $11 billion in capital investment is required. This is especially true in automotive when the 2 million vehicle mark is hit (1.8 million in 2003).

Mexico

The GDP forecast for Mexico in 2005 is a 3% increase. Casting imports to the U.S. are expected to be 292,000 tons in 2005. Both ductile iron and aluminum are forecasting continued growth, spurred by new high production facilities and the automotive market.

Canada

Canada's weak currency exchange rate will help increase exports in 2005. Casting imports to the U.S. in 2005 are estimated to be 343,000 tons, with aluminum casting production on the rise. Canada expects its GDP to exceed 2.5% in 2005-06.

Table 1. Forecast of Gray & Ductile Iron Automotiveme Casting
Production in Western Europe (000 metric tons)

Country             2002               2005               2007

               Gray    Ductile    Gray    Ductile    Gray    Ductile

Austria          32       25        30       32        25       34
Belgium          40        7        48       12        53       15
Finland          13        9        16       15        20       20
France          443      270       402      250       360      240
Germany         720      400       700      420       600      390
Italy           160      120       144      142       150      130
Netherlands      24       10        21       10        25       15
Portugal         20       26        35       30        40       40
Spain           341      383       348      400       361      420
Sweden           35       17        40       16        50       18
Switzerland      12       12        10       16        15       20
Turkey          120       49       160       60       200       70
U.K.            156       80       150       90       140       85
Other            40       40        40       85        40       34

TOTAL          2156     1448      2143     1578      2079     1531

Table 2. Forecast of Gray Iron Casting Production in Western Europe
(000 metric tons)

Country        2002    2003    2005    2007

Austria          52      48      55      65
Belgium          78      81     102     115
Finland          56      52      62      70
France         1081     924    1035     940
Germany        2253    2296    2150    2090
Italy           933     907     940     900
Netherlands      60      61      70      70
Norway           20      17      25      25
Portugal         35      39      55      60
Spain           592     498     621     650
Sweden          157     158     170     182
Switzerland      29      27      35      50
Turkey          620     592     670     750
U.K.            545     537     568     561
Other           100      90     130      96

TOTAL          6611    6327    6688    6628

Table 3. Gray Iron Shipments in Western Europe by Market (000 metric
tons)

Market                 2002    2005    2007    02/,07 AGR *

Motor Vehicle          2156    2143    2079        -0.7%
Municipal/Bldg.         802     860     845        +1.1%
Pipe Fittings           575     494     468        -2.6%
Mach.Plant Engr.       1224    1276    1401        +2.7%
Farm Equipment          415     364     354        -3.1%
Steel, IM, Roll         156     140     104        -7.8%
Valves                  253     282     264        +0.9%
Construction/Mining     240     285     282        +3.3%
Appliances              122     126      71       -10.3%
Engines                 349     341     434        +4.5%
Other                   359     377     326        -1.9%

TOTAL                  6611    6688    6628        +0.1%

* average growth rate

Table 4. Ductile Iron Production in Western Europe (000 metric tons)

Country        2002    2003    2005    2007

Austria         110     100     118     124
Belgium          19      15      42      50
Finland          43      39      50      70
France         1232    1095    1180    1180
Germany        1277    1342    1360    1320
Italy           444     458     460     480
Netherlands      60      60      80      93
Norway           44      37      48      50
Portugal         52      53      60      80
Spain           643     420     672     723
Sweden           57      50      56      75
Switzerland      51      46      56      60
Turkey          139     187     190     200
U.K.            326     367     425     400
Other           130     100     125      50

Total          4627    4369    4922    4955

Table 5. Ductile Iron Shipments in Western Europe by Markets (000
metric tons)

Market                 2002    2005    2007    '02/'07 AGR

Motor Vehicle          1448    1578    1531        1.1%
Construction            492     520     541        1.9%
Mach. Plant Engr'g.     405     474     489        3.8%
Farm Equipment          256     278     277        1.6%
Pipe/Fittings          1591    1609    1622        0.4%
Steel/Rolls             104     101      82       -4.6%
Other                   331     362     413        4.5%

Total                  4627    4922    4955        1.4%

* average growth rate

Table 6. Aluminum Shipments in Western Europe (000 metric tons)

COUNTRY        2002    2003    2005    2007

Germany         661     677     720     768
Italy           777     805     840     880
France          365     329     385     400
U.K.            170     180     205     225
Spain           256     132     280     310
Austria         103     104     110     130
Sweden           37      37      43      56
Switzerland      17      15      22      34
Netherlands      18      17      20      22
Other            85      87      92     100

TOTAL          2489    2383    2717    2925

Table 7. Forecast Gray and Ductile Iron Production in Eastern European
Countries (000 metric tons)

Country              2002               2005               2007

                  Gray    Ductile    Gray    Ductile    Gray    Ductile

Czech/Slovakia    247       42       300       52       360       70
Hungary            50       12        62       22        70       30
Poland            389      102       420      120       450      143
Romania           260       22       280       25       300       40

Table 8. Forecast of Metal Casting Production In Russia
(000 metric tons)

      2002    2005    2007

GI    4100    4500    3600
DI     300     350     400
AI     400     440     490

Table 9. Gray & Ductile Iron Production Forecast for Japan (000 metric
tons)

Industry                       2002          2005          2006

                            GI     DI     GI     DI     GI     DI

Industrial Mach. & Eng.     450    135    480    162    490    172
Mining/Constr. Machinery     58     90     80    105     90    110
Metalworking Machinery      100     10    120     11    125     11
Rolls/Molds                  50     18     50     21     40     22
Other Machinery             105      8    130      9    140      9
Electrical Equipment         70     16     80     18     80     18
Automotive                 1380    800   1300    950   1250    990
  Parts/Compon.
Other Vehicles               70     30     80     34     90     35
Other                        68     55     90     70    100     73
Pipe                         --    580     --    680     --    710

TOTAL                      2351   1742   2410   2060   2405   2150

Table 10. Aluminum Casting Production Forecast for Japan (000 metric
tons)

Industry                      2002           2005            2006

                           DC     PM/S    DC     PM/S     DC     PM/S

Industrial Mach. & Eng.     52     16      67     20       71     21
Electrical Equipment        42      8      50      9       53      9
Automotive                 521    291     625    348      660    360
Motorcycle & Other Veh.     52     10      62     12       65     13
Other                      125    100     148    120      155    125

TOTAL                      792    425     952    509     1004    528

DC=Diecast; PM/S=Permanent Mold & Sand

Table 11. Forecast of Casting Shipments in China (000 metric tons)

Metal           2000    2001    2002    2003     2004     2006

Ductile Iron    2334    2730    2995     3630     3800     4000
Gray Iron       5649    9002    9840    10800    11800    12800
Aluminum         789     850     970     1249     1300     1500

Table 12. Chinese Casting Usage Forecast for 2006 (000 metric tons)

Market                        Gray Iron    Ductile Iron    Aluminum

Automotive                       3720           890          1200
Locomotive                        270           --            --
Farm & Engine                    1650           270           --
Machine Tool                      980           --            --
Valves & Spec. Mach.              270           100           --
Construction/Mining Mach.         770           100           --
Electrical/Power Equipment        270           --            --
Ingot Mold                        980           --            --
Pipe & Fittings                  2730          1500           --
Leasure                          --             --            100
Other                            1160          1140           200
TOTAL                           12800          4000          1500

Table 13. Casting Shipment Forecast From Korea (000 metric tons)

               1999   2000   2001   2002   2003   2004   2005

Gray Iron      895    905    870    925    944    1000   1000
Ductile Iron   482    496    480    523    539     535    600
Aluminum        38     41     40     46     78      80     90

Table 14. Casting Shipment Forecast From India (000 metric tons)

                2002    2003    2005    2007

Gray Iron       2370    2840    2500    2750
Ductile Iron     300     363     380     400
Aluminum         180     200     220     280

North & South America (non U.S.)

Table 15. Forecast of Casting Production in Brazil (000 metric tons)

Metal    1999    2000    2001    2002    2003    2006

GI       971     1168    950     1219    1230    1300
DI       361      379    350      494     519     600
AI        98      108    100      122     150     180

Table 16. Casting Production Forecast for Mexico (000 metric tons)

      1999    2000    2001    2002    2003    2006

G1    631     704     650     760     770     850
DI     44      56      75     175     200     280
AI    454     600     540     480     550     700

Table 17. Casting Shipment Forecast from Canada (000 metric tons)

                1998    1999    2000    2001    2002    2003    2004

Gray Iron       550     583     531     514     530     474     474
Ductile Iron    150     175     190     170     170     180     180
Aluminum         64      69      70      68      70      70      70

                2005    2007

Gray Iron       500     470
Ductile Iron    200     220
Aluminum         85     100

For More Information

Visit www.moderncasting.com for the "38th Census of World Casting Production--2003," MODERN CASTING, December 2004.

"11% Growth Forecast for Next 4 Years, Led by Aluminum, Ductile Iron," K.H. Kirgin, MODERN CASTING, January 2005, p. 22-27.

About the Author

A 50-year foundry industry veteran, Ken Kirgin founded Stratecasts in the early 1980s to provide domestic and international forecasting and trends analysis and strategic planning,.

Kenneth H. Kirgin

Stratecasts Inc., Fort Myers, Florida