Overall 'Soft Landing' Continues.
Though sales of passenger cars and light trucks kept pace with last year and have actually grown slightly in the first half of '00, high inventories have resulted and plant idlings are planned in the second half. A 4.6% loss in production of light vehicles is likely, thus reducing casting demand. Many production foundries, however, are forecast to continue to operate at high utilization rates into '01.
Housing starts have begun to feel the increase in interest rates and declined in the first half, enforcing the 2% forecast decline in '00, followed by a continued decline of 1% in '01.
Casting imports from Asian and NAFTA nations continue to increase and are affecting shipments from U.S. foundries despite high demand in some market sectors.
Shipments of gray iron castings are forecast to decline 5% to 5.6 million tons in '00.
Motor Vehicles--Gray iron casting shipments for light vehicles are expected to drop to 1.6 million tons, as the weight per light vehicle shrinks to 280 lb based on the continued conversion of iron blocks and heads to aluminum. Shipments of light trucks are again expected to reach 55% of the total light vehicle production, keeping the weight per vehicle relatively high. Based on the increased conversion to aluminum over the next 5 years, gray iron's application per vehicle is expected to drop below 200 lb.
The forecasted reduction in medium-to-heavy truck production in '00 should reduce casting shipments to this market sector to 139,000 tons, representing a 15% reduction from the peak production in '99.
Diesel Engines--Though engine production has remained high in the construction machinery sector, diesel engine demand has been reduced, due to the decline of truck/tractor production. A decline in gray iron casting shipments of 8% is expected this year.
Construction Machinery & Equipment--Based on a forecasted increase in exports this year, construction machinery production is expected to increase 1% despite a decrease in construction activity. Iron casting production for heavy off-road equipment is expected to rise again this year.
Machine Tools--Though the first 6 months of '00 yielded a slight rebound in U.S. machine tool shipments, gray iron foundries supplying this market sector continue to experience a slowdown in sales. The rebound is expected to continue into '01 and offer an increase in demand for iron castings.
Special Industry Machinery--A second straight year of decline is expected for most market sectors in the special industry machinery classification. Casting production in '00 is expected to decline another 2%, followed by a continued slowdown in '01.
Pumps & Compressors--A loss in iron casting shipments of up to 4% is expected in '00, though the closing of some captive facilities should aid some jobbing foundries that produce compressor parts.
Shipments of ductile iron castings are expected to decline 2.5% this year from last year's high to 4.27 million tons. However, production levels are consistent with the peak levels seen from '94-'98.
Motor Vehicles--Spurred by the high production of light trucks and vans, ductile iron usage has jumped to 190 lb/vehicle. This figure, however, is expected to begin dropping back to the 170-lb level due to the loss of some crankshaft applications to steel forgings in aluminum engines, and suspension parts converted to aluminum. A 2% drop in ductile iron usage in light vehicles is forecast for this year (to 1.134 million tons). Consumption in medium-to-heavy trucks is also expected to decline to 230,000 tons as truck production slips.
Pipe--Ductile iron shipments of pressure pipe are again expected to exceed 1.8 million tons, though a 1% drop is expected from '99 levels. The closing of a Canadian plant and increased exports is expected to keep plant utilization levels high.
Valves & Fittings--Despite pressures from rising imports (growing at an annual rate of nearly 4%), shipments of ductile iron castings should decline by just 2% this year to 225,000 tons and 2% in 01 as housing starts drop.
Farm Machinery--Shipments of farm machinery dropped more than 30% last year, and an additional 5% is expected this year. This was caused by a falloff in domestic demand as well as a loss in exports to Asian countries. Ductile iron casting shipments declined from a high of 133,000 tons in '98 to 100,000 in '99, and are expected to drop further to 97,000 tons this year.
Construction Machinery & Oil Field Equipment--An increase in demand for construction machinery and for equipment used for oilfield drilling has spurred ductile iron growth. Despite the forecasted drop in construction activity in '00-'0 1, ductile iron usage for the construction machinery and oilfield equipment markets should grow by annual rates of 2% and 8-10%, respectively.
Shipments of steel castings are forecast to fall off 8.7% this year to 1.212 million tons.
Railroad--After two years of peak shipments, a drop of 14,000 freight car deliveries is forecast this year, reducing steel casting consumption in the this market to 110,000 tons following the peak year in '99. A further decline of 7.7% is forecast for '01.
Mining Machinery & Equipment--After declining 5% in '99, the mining industry is expected to rebound at a rate of 5% per year in '00-'01. Growth is expected to continue and lead to record-level steel casting shipments of 100,000 tons per year by '05.
Trucks--Steel casting shipments are forecast to decline 90,000 tons in '00 as production of medium to heavy trucks decrease from a peak level in 1999.
Shipments of aluminum castings peaked last year at 2 million tons and are expected to top that mark again in '00. Aluminum die casting shipments are also expected to repeat last year's record of 1.2 million tons.
Motor Vehicles--Aluminum casting weight per vehicle passed 200 lb in '00 and is expected to grow to 250 lb within the next 5 years.
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|Title Annotation:||metal casting industry market conditions|
|Comment:||Overall 'Soft Landing' Continues.(metal casting industry market conditions)|
|Author:||Kirgin, Kenneth H.|
|Article Type:||Brief Article|
|Date:||Sep 1, 2000|
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