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Forecasted downturn under way.

Recent interviews with key personnel of major casting consumers have reinforced our earlier forecast for a downturn in 1996. The downturn is expected to continue until '97, when a slight recovery is expected to take place. Recovery of the European market has also stalled, thus reducing export potential.

Stratecasts continues to forecast a 7-8% decline in most casting market sectors for the remainder of year, followed by a 2.5% increase in '97.

Gray Iron

Shipments of gray iron castings in the U.S. declined about 2.5% in '95 from the 6.4 million ton-high in '94. A further drop-off of 8% is forecast for'96 to 5.7 million tons. Declines are expected in most market sectors as the economy weakens.

Motor Vehicles--Automakers are expected to produce some 10.8 million light vehicles in '96. As a result, gray iron shipments for use in light vehicles is forecast at 1.9 million tons, a drop-off of 9.5% from '95.

Medium-to-heavy truck production is expected to take a larger drop of 12%, to 280,000 vehicles. A decrease in trailer production of 10% to 180,000 units will also decrease casting demand.

Municipal Castings--Our original estimate of a 6% loss of gray iron demand in this market sector has been increased to 8%, based on an expected slowdown in construction activity and housing starts. The new estimate is 420,000 tons in '96.

Machine Tool Castings--Shipments of gray iron for U.S. consumption of machine tools in '95 increased slightly from the peak year of '94 to 125,000 tons. This amount is expected to drop to 115,000 tons in '96, as automotive demand for machine tools decreases.

Pumps and Compressors--This market sector, which remained healthy in '95 and equalled the sales levels of '94, is expected to decline in '96. Gray iron casting shipments to this market are expected to decline 7% to 210,000 tons in '96.

Special Industry Machinery--Gray iron shipments from foundries to special machinery manufacturers are forecasted to decline 4% in '96 to 200,000 tons.

Internal Combustion Engines--Based on decreased truck and construction machinery production in '96, a drop of 8% is expected to 480,000 tons of gray iron castings.

Refrigeration and Air Conditioning--Though exports continue strong in '96, a loss of 6% in casting production is expected for this market sector. A sizeable increase in exports in '97 should bring casting consumption for compressors to 135,000 tons.

Household Appliances--Substitution of plastic for some iron parts should reduce casting use in appliances to 80,000 tons in '96.

Ductile Iron

Shipments of ductile iron are forecasted to drop below the 4 million ton level in '96 to 3.75 million tons, a 7% decline from '95.

Pipe--Ductile iron pipe production dropped below the expected 1.8 million ton level in '95 and is expected to drop to 1.7 million tons in '96 as construction activity declines.

Motor Vehicles--Based on the reduced demand from light vehicle and truck manufacturers, ductile iron consumption in this market sector is expected to decrease 9% to 970,000 tons in '96.

Continued conversion of steel wheels and differential parts on trucks to ductile iron is expected to bring ductile iron use in heavy trucks to over 200,000 tons in '98.

Special Industry Machinery--The forecasted loss of casting demand in plastic and printing machinery in '96 is expected to decrease ductile iron consumption in this market sector by 5% in '96 to 88,000 tons.

Construction Machinery & Equipment--Decreased construction activity in '96 could lower ductile iron consumption by 5% this year versus '95.

Steel Castings

Spurred by two strong years of freight car production, steel castings enjoyed another good year in '95, finishing up the year slightly below 1.38 million tons in shipments. Based on forecasted declines in mining machinery, freight car and construction machinery production, casting shipments are expected to decline 10% to 1.2 million tons in '96.

Railroad--Freight car production is expected to drop to 43,000 cars in '96, thus reducing steel casting use of railroad castings to 580,000 tons.

Construction and Mining--A loss of demand in '96 of about 11% is forecasted, reducing steel casting consumption to 155,000 and 98,000 tons, respectively, in these markets.

Corrosion-Resistant Castings--Spurred by valve and pump demand in corrosive environments, corrosion-resistant steel casting shipments reached 71,000 tons in both '94 and '95. A 10% reduction of shipments is forecast in '96, based on a drop in chemical plant and petrochemical construction activities.


After achieving two consecutive peak years in shipments during '94 and '95 at 1.6 million tons, a decline of 8.6% in consumption is forecasted for aluminum castings in '96.

Motor vehicles--Aluminum casting consumption in motor vehicles is forecasted to reach 152 lb per vehicle in '96, or 828,000 tons.

Brass & Bronze Castings

Shipments of brass and bronze castings are forecasted to decline 10% in '96 to 271,000 tons based on lower demand for plumbing fittings and industrial valves. Shipments are forecasted to bounce back in '98 to 318,000 tons.
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Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Kirgin, Kenneth H.
Publication:Modern Casting
Article Type:Industry Overview
Date:Mar 1, 1996
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