Results revealed for Section 332 investigation on competitive market conditions facing metalcasters.

The U.S. Internal Trade Commission (ITC) completed its fact-finding Section 332 investigation into the competitive conditions facing the U.S. metalcasting industry. The report, "Foundry Products: Competitive Conditions in the U.S. Market," was released on May 27.

In March 2004, AFS requested that the ITC perform the fact-finding investigation so the U.S. metalcasting industry could better understand its future challenges. The report released from this investigation analyzes competitive conditions affecting the U.S. metalcasting industry in the domestic market and provides profiles of major foreign industries and descriptions of relevant U.S. and foreign government policies and regulations.

The final report generated by the Section 332 investigation and issued by the ITC makes no formal recommendations on what should be done to combat foreign competition. However, it provides detailed, independent data that may serve as the foundation for future trade actions at the federal level by the industry as a whole or segments of it.

Some of the report's findings include:

* The number of metalcasting facilities reporting operating losses increased from 19 to 29% from 1999-2003. In general, aluminum facilities are in the best competitive condition and have a more favorable financial position relative to the other metal segments, whereas gray iron facilities face the most difficult financial and competitive conditions.

* Developing countries, such as China, Brazil and India, have a price advantage in the U.S. market. This advantage derives in part from the lower production costs of these countries, mostly the result of a wide disparity in metalcasting wage rates between U.S. and foreign facilities.

* Lower energy costs and less stringent enforcement of worker health and safety and environmental laws provide foreign facilities in Brazil, China and India with a competitive advantage.

The full fact-finding report, "Foundry Products: Competitive Conditions in the U.S. Market" (Investigation No. 332-460, USITC Publication 3771, May 2005), is available for download at www.usitc.gov. AFS currently is reviewing the 368-page report to gain insight into how the industry can interpret its findings, and will issue a more detailed, formal statement about it in the near future.

The ITC report is based on a confidential survey sent out to U.S. casting producers, domestic casting purchasers and foreign casting producers requesting financial and operating information.