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1996 slowdown sets stage for '97 resurgence.

An 8% drop-off during the coming year will provide many foundries with some much-needed breathing room for a '97 comeback.

As expected, the economy weakened somewhat in late 1995 and the softening is expected to continue into '96. The boom conditions of '94 and early '95 subsided and have affected casting sales, particularly in the last quarter of the year. While casting sales are expected to continue to decline in '96, this will set the stage for a resurgence in '97 and lead to peak years in '98 and '99.

Shipments of metal castings in the U.S. are forecasted to decrease 8.2% in '96 before climbing back 3.5% in '97, on the way to a peak year in '98. Major market segments are predicted to weaken in '96, resulting in the lessening of supply problems in specific market sectors and allowing supply to catch up to demand through investment and expansion. Record sales of light vehicles in '94 and '95 are expected to slip by 8.4% in '96. This bearish forecast is based on a projected lower Gross Domestic Product (GDP) growth of 1.5%, along with declines in construction activity and housing starts in '96.


The iron and steel casting industry is now a mature, stable industry, with forecasted shipments in '95 of 11,876,000 tons. A decline of nearly 1 million tons is projected for '96, an 8% loss compared to '95.

Gray Iron

After experiencing peak years of over 6 million tons in '94 and '95, shipments are expected to drop-off somewhat to 5.7 million tons in '96.

Light Vehicles - Domestic production of passenger cars and light trucks reached highs of 12.1 million units in '94 and 11.9 million units in '95. These lofty shipment figures are expected to drop to 10.9 million in '96.

Medium to Heavy Trucks - Gray iron castings in medium to heavy trucks, not including engine castings, peaked at 140,000 tons in '95, and are expected to grow to 153,000 tons by 2005. Major applications include drums and rotors for trucks. buses and trailers.

Municipal Castings - Shipments of municipal castings in the U.S. are expected to drop by 6% in '96 to 425,000 tons. This will include 174,000 tons of covers, frames, lids and grates, with the balance in hydrants and centrifugal and static castings used in street construction.

The forecast is based on a decline of 3% in highway and street construction, combined with a decline in commercial construction.

Housing starts are expected to decline 6% in '96. Construction activity is expected to slip 4% in '96 but will maintain a long-term growth rate of 2.5% per year.

Soil Pipe - Cast iron soil pipe shipments in the U.S. are forecasted to drop-off by 7% in '96. A continuous 5% per year conversion to PVC pipe will offset any increases in building activity. Production of gray iron soil pipe in the U.S. is down to three major producers, plus some small regional foundries.

Ingot Molds - It is estimated that nearly 90% of all raw steel processed in this country is accomplished using the continuous casting method. This translates into a 5 lb per ton of steel use of ingot molds or 213,000 tons of molds and tools in the U.S. This is a reduction of 4 million tons from peak consumption in the '70s.

Sanitary and Radiator - The expected decrease in housing starts in '95 and '96 has affected the sales of bathtubs, lavatories, sinks, and boiler and radiator castings. A 7% decline in shipments is forecasted for '96.

Valves and Fittings - A 7.1% decrease in consumption of gray iron valves and fittings is forecasted for '96. The loss of the Mexican market combined with less construction activity in the U.S. has caused the decline.

Internal Combustion Engines - With the increase in heavy truck production, diesel engine casting consumption continued to grow in '95. Medium-to-heavy truck production reached a peak of 330,000 vehicles in '95. Gray iron casting shipments to diesel engine manufacturers grew by 3% in '95. An expected downturn in truck and construction equipment production will result in a 6% drop-off in gray iron casting shipments in '96.

Farm Machinery - Shipments of farm machinery grew 22% in constant dollars in '94 and are showing only a slight 1% decline in '95. Gray iron casting use in farm machinery, exclusive of engine castings, is expected to decline to 300,000 tons in '96.

Construction Machinery and Equipment - Shipments of construction machinery and equipment grew 7% in '94 in constant dollars, spurred by an increase in housing starts. A 5% decline in building activity in '96 will affect casting purchases. Shipments of gray iron castings are projected to decline 5.1% in '96 to 188,000 tons.

Mining Machinery - Shipments in the U.S. mining industry increased 8% in '94 and a continuing 1% in '95, and have recovered from three years of continuous losses.

Machine Tool - Spurred by growth in the automotive industry, machine tool shipments from U.S. manufacturers increased 14% in '94 over those in '93. A slight decline in '95 took place as expected. Gray iron casting use is expected to fall 5.7% in '96 and will probably show little growth in the foreseeable future.

Pumps and Compressors - Gray iron casting shipments to this market grew 12% in '94 and declined only slightly in '95. After another slight drop-off in '96, consumption is expected to return to the '94 levels of 230,000 tons by '98.

Refrigeration and Air Conditioning - Major producers, including Copeland, Bristol and Carlyle, continue to forecast strong sales increases during the next few years. Sale of gray iron castings to this market sector should average nearly 150,000 tons per year into '98.

Household Appliances - The use of gray iron castings in household appliances continues to decline as plastics are substituted in specific applications. Gray iron shipments, now 95,000 tons per year, are expected to decline.
U.S. Average Monthly Composite Price for No. 1 Heavy Melting Steel
in 1994 ($/metric ton)

 1994 1995 YTD(*)

January 133.36 139.74

February 135.65 136.48

March 136.47 131.47

April 133.78 132.54

May 117.52 135.50

June 106.37 132.52

July 112.81 131.06

August 127.86 140.86

September 128.44 N/A

October 126.15 N/A

November 130.05 N/A

December 133.26 N/A

Annual Average

1995(Through Aug.) 135.02

1994 126.81

1993 112.44

* Calculated by the U.S. Bureau of Mines from prices published
in American Metal Market.

Ductile Iron

Shipments of ductile iron in the U.S. reached 4,069,000 tons in '94 and dropped off somewhat to 4,003,000 tons in '95. A decline of 6.4% is expected for '96 to 3,746,000 tons.

Pressure Pipe - Ductile iron pipe, which makes up nearly 44% of the total ductile iron shipments, reached a new high in '94 at 1.8 million tons before decreasing slightly in '95.

Motor Vehicles - Consumption of ductile iron in light vehicles remains at about 175 lb per vehicle. After two consecutive 1 million ton years, ductile iron light vehicle use is expected to decline 8% in '96 to 973,000 tons.

Ductile iron use in medium to heavy tracks has increased to 200,000 tons per year. A slight decline is expected in '96. The use of ductile iron in rear-end axle parts, as well as in hubs and integral cast wheels, can further increase these forecasts.

Special Industry Machinery - The papermaking-machinery industry has recovered from three years of decline and showed two consecutive growth years in '94 and '95. A further increase in paper-machinery sales is expected in '96. Because of these gains, ductile iron use in the total special industry machinery sector is forecasted to have only a slight decline in '96 to 93,000 tons.

Farm Equipment - Ductile iron castings for farm machinery and equipment parts are projected to decrease slightly from 114,000 tons in '95 to about 106,000 tons in '96.

Construction Machinery and Equipment - Ductile iron's continued replacement of steel in rear axle applications and substitution for fabrications has spurred its growth in construction machinery. Despite this, it is forecasted to drop-off from 152,000 tons in '95 to 144,000 tons during the coming year.

Power Transmission - A growth rate of 3.5% per year is expected for ductile gears and other transmission parts. The growth of austempered ductile iron parts, replacing steel forgings, is also anticipated.

Oil Field Equipment - Use of ductile iron castings in oil field machinery and equipment is expected to decline somewhat from 49,000 tons in '95 to 47,000 tons in '96.

Malleable Iron

Malleable iron casting shipments grew to 258,000 tons in '94. This was up by 19,000 tons from '93.

Pipe Fittings - With the continued use of ANSI specified malleable iron in threaded pipe fittings, malleable iron shipments reached 50,000 tons. A gradual change in some specifications to ductile iron is expected and will lower the overall use of malleable iron during the next decade.

Automotive - Automotive consumption of malleable iron was 156,000 tons in '94. Shipments are expected to be reduced to 140,000 tons in '96.

Steel Castings

Steel casting shipments are forecasted to decline 12% in '96 from the 1.4 million tons shipped in '95 to 1.2 million tons. The expected drop-off in freight car production combined with 6-7% decline in other market sectors will contribute to the decrease in '96.

Carbon and Low-Alloy Steels

Shipments of carbon and low-alloy steel castings totaled 1,285,000 tons in '95 but, like most of the other cast metals, they are expected to drop-off somewhat in '96 to about 1,054,000 tons.

Railroad - Resurgence of the coal mining industry combined with increased grain shipments has spurred growth in the production of freight cars and locomotives in the U.S. In '95, production reached 50,000 car sets, and it is expected that production in '96 will only drop to 43,000 sets. Based on this production, carbon and low-alloy steel casting consumption for railroad applications increased to 710,000 tons in '94, equal to 1981 production. Use decreased slightly in '95 to 680,000 tons and is expected to decline to 610,000 tons in '96.

Construction - Shipments to this market sector in '96 are projected to decline 7% before returning to the 150,000 ton level in '98 as building activity increases and exports spur construction equipment sales.

Mining - Consumption of steel castings increased in this market in '94 and again in '95 to 80,000 tons. After a slight decline in '96, shipments are expected to continue to advance to 84,000 tons per year in '98 and '99.

Valves and Pumps - It is anticipated that carbon and low-alloy steel valve castings will grow 2.4% per year in the long term. After achieving highs of 67,000 and 65,000 tons in '94 and '95, shipments are expected to decrease 6% in '96.

Tracks - Use of carbon and low-alloy steel in trucks and trailers continued strong in '94 and '95 at 90,000 tons.

Corrosion-Resistant Steels - Corrosion-resistant stainless steels continue to grow with the process industries that consume the pressure vessels that hold fluids in corrosive environments. Cast stainless valves are expected to decline only slightly in '96 for use in food machinery, petrochemical applications, and acid and salt environments in waste material removal.

Heat-Resistant Steels - Shipments of 33,000 tons were consumed in '94 and '95. A decline to 29,000 tons is expected for '96. Growth of the high nickel-chrome alloy castings is also expected in fertilizer and ammonia plants.

Manganese & Wear-Resistant Steels - Manganese steel castings reached a high of 34,000 tons in '94. A slight decline to 29,000 tons is projected for '96.



Shipments of aluminum castings are projected to improve 2.8% per year to 2.1 million tons in the next 10 years. Following a decline of 8.4% in '96, production of aluminum castings is expected to peak at 1.8 million tons in '98.

Aluminum die casting demand is forecasted to continue to grow based on increased use in vehicles. Long-term growth of 1.6% is forecasted, with a peak year of 1 million tons in '98.

Spurred by engine block and cylinder head growth, permanent mold and sand-cast aluminum is projected to increase 4.2% over the long term. After a 5% decline in '96, production is expected to rise with automotive production to a peak in '98 of 770,000 tons.

Motor Vehicles - Aluminum casting consumption in motor vehicles continues to grow at a rapid rate. The average weight of cast aluminum per vehicle has increased to 150 lb per vehicle. Total aluminum casting production reached a high of 892,000 tons in '95. Shipments are forecasted to decline to 828,000 tons in '96.
Aluminum Castings as a Percent of Total Units Produced in the U.S.

PART 1995 1999

Engine Block 10% 25%

Cylinder Head 37% 80%

Intake Manifold 75% 70%

Transmission Case 90% 92%

Wheels 38% 52%

Pistons 80% 85%

Brakes, Suspension 0.2% 5%

Internal Combustion Engines - It is forecasted that aluminum casting production for this market will fall from 98,000 tons in '95 to 91,000 tons in '96. Permanent mold gear and flywheel housings are major diesel engine growth applications.

Aircraft - Shipments of aircraft in '94 dropped 12% and showed a further drop-off in '95 as commercial and military production declined. A decline to 50,000 tons is forecasted for '96.

Copper-Base Castings

Shipments of brass and bronze castings are expected to decline in '96 to 271,000 tons. Growth is projected in '97 and '98 to a high of 318,000 tons in '98.

Valves and Fittings - Industrial valves and fittings are expected to fall off just slightly from 102,000 tons in '95 to about 100,000 tons in '96.

Electrical Equipment - A decline between '95 and '96 is also projected for consumption of bronze castings in electrical equipment, meters and ball bearings from 18,000 tons to 14,000 tons.

Plumbing - Valves and fittings for use in plumbing applications are showing a decline of 1.1% per year as a result of their substitution by plastics.

Zinc Die Castings

Zinc die castings, spurred by two good automotive years, have increased shipments to 160,000 tons per year. Long-term growth, however, is suffering from material substitution and is expected to decline by some 1.7% per year during the next decade.

Magnesium Castings

The market for automotive die castings in magnesium is forecasted to grow to 8 lb per vehicle by early in the next decade. Magnesium has been specified in many applications, including clutch and brake pedal support brackets, steering gear assembly parts and clutch housings. Besides automotive use, other significant applications for magnesium cast parts are in chain saws, fishing rods, power tools and sporting goods.

Investment Castings

Shipments of investment castings are forecasted to increase 2.8% per year from 144,000 tons in '95 to 189,000 tons in 2005.

Their major commercial application is in valve parts, which consume 50,000 tons per year. Other commercial applications include pumps, golf club heads, gun parts, turbine blades and office machine components.

Aircraft engine blades and vanes, which consume 33% of the total value of investment castings, will show little growth because of the curtailment of federal spending.

Casting Supply

The number of foundries in the U.S. has decreased from 6150 in '55 to 2950 in '95. Correspondingly, the industry has lost about 9 million tons of capacity during this same period of time. The following are the forecasted casting capacity and demand/supply ratios for 1996:
Metal Capacity Demand/
 (000 tons) Supply

Iron 12,330 79%
Steel 1540 79%
Aluminum 2110 76%
Copper-Base 390 69%
Magnesium 40 73%
Zinc 430 75%
Other Nonferrous 62 61%
Investment Casting 194 73%

Total 17,096 77%

Ferrous Casting Supply

Based on the projected ferrous casting shipments of 10,928,000 tons in the U.S. in '96, the approximate breakdown by states is:
1. Ohio 15.0%
2. Alabama 11.9%
3. Wisconsin 11.3%
4. Indiana 9.0%
5. Michigan 8.2%
6. Illinois 7.0%
7. Pennsylvania 5.6%
8. California 3.7%
9. Tennessee 3.1%
10. Virginia 2.8%

This article was adapted from the 1996 AFS Metalcasting Forecast and Trends Report. Copies of the 50-plus page report are available from AFS Publications: $300 list; $225 personal members. AFS corporate members receive a complimentary copy of the report. Additional copies are $50.


Brokers, dealers and other outside sources supplied domestic consumers in '94 with 49 million tons of all types of ferrous scrap at an estimated deliveries value of $6.2 billion, while exporting 8.8 million tons (excluding used rails for rerolling and other uses, and ships, boats and other vessels for scrapping) valued at $1.3 billion. In 1993, domestic consumers received 46.3 million tons at a delivered value of about $5.2 billion;exports totaled 9.81 million tons valued at $1.3 billion. For '94, this represented a tonnage increase of about 6% for received quantities and a tonnage decrease of about 10% for exported quantities. The total value of received and exported scrap grades increased about 15%.

In '94, steel mills accounted for 82% of all scrap received for brokers, dealers and other outside sources; steel foundries received 3% and iron casting producers and miscellaneous users received 16%. The apparent total domestic consumption of ferrous scrap in '94 was composed of 50 million tons net receipts (total receipts minus shipments) and 20 million tons of home scrap.

The total market for U.S.-produced scrap (net receipts plus exports minus imports) was 57 million tons in '94 compared with 54 million tons in '93.

This report was excerpted from the U.S. Department of the Interior - Bureau of Mines "Mineral Industry Surveys - Iron and Steel Scrap Annual Review '94" and "Iron and Steel Scrap in July 1995.
COPYRIGHT 1996 American Foundry Society, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:1996 Metalcasting Forecast & Trends; includes related article on ferrous scrap situation in 1994
Author:Kirgin, Kenneth H.
Publication:Modern Casting
Article Type:Cover Story
Date:Jan 1, 1996
Previous Article:Steel casters discuss industry forecast and capacity.
Next Article:Maximum blastcleaning machine efficiency starts with the basics.

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