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Solid economy continues to fuel casting growth.

With no sweeping changes in the U.S. economy on the horizon, foundries can expect another solid year in 1998 - as total shipments increase 7%.

The forecast of economic conditions in the U.S., Europe and Asia are again favorable for continued expansion of casting demand and shipments during 1998. Shipments of castings in the U.S. are expected to increase 7% this year to 14.9 million tons or 1% above the peak year of 1994.

A survey of key economists and economic forecasters indicates that surges in key economic indicators are expected to propel the economy to new levels. The gross domestic product (GDP) is expected to increase 4% over '97, while housing starts and construction activity both rise by 8%. These trends are expected to be fueled by investment from baby boomers and immigrant births, both of which have reached ages of maximum income and spending.

The motor vehicle industry is again expected to expand. Light truck production is expected to reach a peak of 5.7 million vehicles while passenger cars increase 6% to 6.4 million units. At the same time, medium-to-heavy truck production is expected to pick up after two down years and increase to 310,000 vehicles. A major factor in this growth is the globalization in the production of these vehicles, as transplant production is expected to peak at 2.6 million vehicles in this year - an increase of 8%.

The manufacture of farm equipment is also expected to continue to expand. Farm machinery and equipment sales are forecast to exceed $12 billion, including growth in harvesting machinery to $3 billion.

At the same time, railroad freight car shipments in '98 are projected to increase to 50,000 car sets.

The European economy, too, is expected to continue its slow rise to new levels over the next two years.

Casting Shipments

The metalcasting industry has reached maturity and probably won't be affected by technological changes that have lowered overall shipments as in the past, though changes will continue to affect specific market sectors. Casting shipments are expected to increase to 14,924,000 tons in '98 with sales reaching $28.3 billion.

By 2007, shipments are expected to grow to 16.3 million tons for an annual growth rate of 1.4%. Casting sales are projected to grow at a rate of 4.2% per year to $38.7 billion, reflecting growth in lighter and higher priced castings.


Shipments of iron and steel castings are forecast to grow to 12.2 million tons this year and at a rate of 1.3% per year in the long term.

Gray Iron

Shipments of gray iron castings are expected to increase 5% in '98 to 6,356,000 tons.

Light Vehicles - U.S. production of passenger cars/light trucks again reached an estimated 11.5 million vehicles in '97. For the fifth consecutive year, more than 10.5 million units were shipped. The short-term forecast calls for expansion during the next two years with production expected to surpass 12 million light vehicles in each of those years.

Consumption of gray iron castings in light vehicles is projected to decline in the long-term at an annual average rate of 1.8% - despite vehicle production increases. Conversion to aluminum will continue to accelerate, particularly after 2000 as CAFE standards force the original equipment manufacturers (OEMs) and transplants to lower the weight of the cars and trucks.

The large increase in the sale of light trucks, sport utility vehicles and vans to 47% of the total light vehicles to be produced this year has softened the blow for gray iron - reducing the rate of decline and lengthening the life of iron block and head production. Conversion to aluminum cylinder heads, however, is expected to rise significantly in 2000 and for engine blocks soon thereafter.

Medium-to-Heavy Trucks - Production of medium-to-heavy tracks in '98 is expected to reach 310,000 units, while trailer shipments are forecast at 215,000 units. Based on these production estimates, 219,000 tons of gray iron castings are expected to be consumed in this market.

The usable metalcasting capacity for 1998 is estimated at 17.5
million tons with a utilization rate of 85%.

Metal Capacity (tons) Utilization

Iron 12,592,000 86%
Steel 1,650,000 84%
Aluminum 2,100,000 84%
Copper-Base 400,000 82%
Magnesium 45,000 82%
Zinc 420,000 88%
Other Nonferrous 50,000 92%
Investment Casting 210,000 81%

Total 17,467,000 85%

Municipal Castings - Shipments of municipal castings are forecast to grow during '98 to 490,000 tons. The demand for municipal castings in the U.S. is projected at 571,000 tons - 90,000 tons of which is supplied through imports from India, Canada, China and Mexico.

Soil Pipe - Cast iron soil pipe and fitting shipments are expected to drop 2.9% per year based on the continuing conversion to plastic, as PVC has replaced iron pipe in many residential areas. This forecast is based primarily on commercial building construction. Overall shipments of soil pipe should reach 303,000 tons this year, a 4% increase over '97.

Ingot Molds - An estimated 90% of all raw steel processed in the U.S. will be produced via continuous casting in '98. This percentage is expected to rise to 95% by 2000 and further reduce the use of ingot molds and stools to 20 lb of molds per ton of steel. An estimated 119,000 tons of ingot molds are forecast to be shipped this year.

Sanitary and Radiator - The forecast for an 8% increase in housing starts in '98 is expected to spur growth in sanitary and radiator castings to 310,000 tons, a 3% increase over '97.

Valves and Fittings - Prospects for the U.S. valve and pipe fittings industry look favorable in both the short and long term, as a growth rate of nearly 2.6% per year is expected.

Based on a forecast for growth in housing starts and construction activity, gray iron valve castings are projected to increase from 280,000 tons in '97 to 296,000 tons this year.

Internal Combustion Engines - Gray iron casting shipments to this market are expected to rise to 517,000 tons this year - representing a figure that is 10% over '97 but 6% below peak production in '95.

Farm Machinery and Equipment - Gray iron casting consumption in tractors and farm machinery, exclusive of diesel engine castings, is expected to grow 4% in '98 to 350,000 tons based on favorable projections for tractor sales.

Construction Machinery & Equipment - Based on the forecast for 8% growth in construction activity in the U.S. this year, gray iron casting use in construction machinery and equipment is expected to rise to 218,000 tons, a 6% improvement over '97.

Mining Machinery - Shipments of mining machinery are expected to grow 8% in '98 and at a long-term annual rate of 2.5%. Gray iron use, led by abrasive and wear-resistant castings, is expected to rise to 37,000 tons this year.

Machine Tools - Spurred by the continued growth in the automotive market, the machine tool industry is forecast to grow 6% in '98. Gray iron casting consumption is expected to peak this year at 141,000 tons and grow at a rate of 1.6% per year in the long term.

Pumps and Compressors - Based on the industry forecast and the division of these markets, gray iron casting shipments are expected to grow from 246,000 tons in '97 to 253,000 tons this year.

Refrigeration & Air Conditioning - Based on the growth in housing starts, a 6% increase in shipments of gray iron castings is expected, reaching 150,000 tons in '98.

Household Appliances - In the short term, this market should experience an annual growth rate of 3% in gray iron casting use, reaching 80,000 tons of castings. However, a 6% decline per year is expected to reduce annual shipments to 40,000 tons during the next decade.

Compacted Graphite Iron

Based on some new engine and bed plate applications, the use of compacted graphite iron castings increased to 34,000 tons in '97 and is expected to grow to 39,000 tons this year.

Ductile Iron

Ductile iron shipments fell slightly in '97 to 3,986,000 tons from 4,034,000 tons in '96. Based on the expected increase of shipments of pipe and castings to most market sectors, a 7% increase is expected for '98, to 4,252,000 tons.

Pressure Pipe - An anticipated increase in exports this year, along with an expected rise in housing starts, should fuel the growth of ductile iron pipe to 1,870,000 tons - 44% of the total domestic ductile iron tonnage.

Motor Vehicles - Demand for ductile iron castings in cars and light trucks is forecast to increase at an average annual rate of 3%. Ductile iron casting weight per light vehicle is expected to reach 180 lb by '98 and increase ductile iron consumption in this market to 1,112,000 tons. Shipments are projected to reach 209,000 tons this year for consumption in medium-to-heavy trucks.

Valves and Fittings - Shipments of ductile iron valve castings are forecast to increase by 6% in '98 to 226,000 tons. A long-term annual growth rate of 3.4% is projected.

Special Industry Machinery - Ductile iron use in this market for the coming year is forecast to reach 102,000 tons.

Farm Equipment - Ductile iron consumption in farm equipment and machinery reached 118,000 tons in '97. Based on the expected growth in the production of tractors and other farm machinery, 122,000 tons of ductile iron are projected to be shipped during '98.

Construction Machinery & Equipment - Based on 8% growth in construction activity this year, ductile iron consumption in the construction equipment market is expected to grow by 6% in '98 to a new peak of 169,000 tons.

Power Transmission - Ductile iron consumption in power transmission equipment, including gears, sprockets, pulleys and sheaves, is estimated at 28,000 tons per year.

Oil Field Machinery - Shipments of oil field equipment are expected to rise 4% this year. Based on this forecast, an estimated 57,000 tons of ductile iron castings are expected to be used in this market sector.

Austempered Ductile Iron

The major use of austempered ductile iron beginning in '98 and '99 could come in shells, projectiles and track shoes for the military to replace forgings. Projected production of ADI in the following potential applications could result in the shipments of 80,000 tons over the next two years:

* engine timing gear trains;

* compressor crankshafts;

* bogey pin covers;

* gears, joints, wheels, shafts and suspension parts in motor vehicles;

* engine parts in the construction, agriculture and auto industries.

Malleable Iron

Malleable iron casting shipments, based on an estimated 90,000 tons produced by General Motors in Saginaw, is forecast to reach 185,000 tons in '98. Over the long term, some current malleable iron applications are expected to be converted to ductile iron.

Pipe Fittings - ANSI specifications continue to specify malleable iron for threaded plumbing fittings. Though conversion to ductile iron is beginning to occur, U.S. foundries will supply an estimated 54,000 tons of malleable iron castings this year. Imports of 21,000 tons from countries such as Thailand are also expected this year, leaving 30,000 tons available for U.S. noncaptive foundries.

Automotive - Some 100,000 tons of malleable iron castings is expected to be consumed in cars and trucks during '98.

Steel Castings

Overall, steel castings are projected to increase from 1.3 million tons in '97 and achieve an average annual growth rate of 1.1% during the next decade. Following is a breakdown of the short-term trends for steel casting shipments:
Type of Steel '98 '99

Carbon/Low Alloy 1,198,000 1,179,000
Corrosion Resistant 79,000 80,000
Heat Resistant 33,000 33,000
Manganese 36,000 35,000
Other Steel(*) 35,000 35,000

Total 1,381,000 1,362,000

* Martensitic wear-resistant steels

Carbon & Low-Alloy Steels

The projected demand/supply ratio for carbon and low-alloy steel castings this year is 0.90. The 100 to 500 lb range of castings is showing a 0.95 ratio with possible supply problems.

Railroad - Orders for freight cars are expected to be near 50,000 cars in '98 and average nearly 45,000 cars per year during the next five years. This market will consume an estimated 630,000 tons of steel castings this year.

Construction Machinery - Projected shipments of steel castings to manufacturers of construction machinery and equipment for '98 is 187,000 tons, a 7% increase over last year. Carbon and low-alloy steels represent 88% of the steel casting shipped to this market. These shipments are expected to reach 165,000 tons this year.

Mining - Shipments of carbon and low alloy steel to the mining industry are projected to increase 5% over '97 to 90,000 tons. Total steel casting consumption by this industry is 116,000 tons, with the balance coming in manganese and wear-resistant steels.

Valves and Pumps - Shipments of carbon and low-alloy steel valve castings reached 70,000 tons in '97, and are growing at a rate of 2.2% per year. Consumption is expected to increase in '98 to 75,000 tons.

The use of steel castings in pumps is estimated to grow to 35,000 tons this year with 19,000 tons in carbon and low-alloy steels.

Truck - Shipments of carbon and low-alloy steel castings to medium-to-heavy truck manufacturers is expected to decline from 78,000 tons in '97 to 65,000 tons in 2007. This forecast is based on the expected conversion of some parts to ductile iron.

Corrosion-Resistant Steels

Shipments of corrosion-resistant steels are expected to grow at a 3.5% annual rate from the 72,000 tons shipped in '97. Short-term growth to 79,000 tons this year is forecast based on expected expansion in valve and pump markets.

Heat-Resistant Steels - Heat-resistant steel casting shipments are projected to grow in the short term to 33,000 tons in '98 and increase 2.1% per year. This increase will be fueled by growth in heat treatment and furnace oven applications, as well as centrifugally cast reformer tube parts.

Manganese & Wear-Resistant Steels - The 9% growth of manganese steel use this year to 36,000 tons and the 6% growth in the consumption of martensitic low-alloy steel wear-resistant components to 35,000 tons are being stimulated by expansion in mining machinery and equipment. About 50,000 tons of pearlitic alloy steels are consumed in the mining and construction industry.


Aluminum Castings

Aluminum casting growth continues to be driven by CAFE regulations for cars and light trucks and continues to grow at a high rate.

Aluminum Die Castings - Shipments of aluminum die castings are expected to grow at a long-term rate of 2.7% per year. They are projected to increase from 978,000 tons in '97 to 1 million tons this year.

Aluminum Permanent

Mold & Sand Castings - Aluminum castings produced by the permanent mold and sand cast processes are forecast to grow from 667,000 tons in '97 to 733,000 tons in '98. Their long-term annual growth rate is expected to be 5.6% as block and cylinder head production accelerates.

Motor Vehicles - Aluminum casting consumption in motor vehicles is projected to reach 972,000 tons this year, an increase of 9% over '97.

Internal Combustion Engines - Die casting use in small gasoline nonautomotive engines is expected to grow to 69,000 tons in '98. Permanent mold and sand cast aluminum, based on use in flywheel and gear housings and other applications in diesel engines, is projected to grow 4.5% per year to 34,000 tons this year.

Refrigeration & Air Conditioning - Aluminum use in scroll compressors continues to grow, increasing die casting production in '98 to 40,000 tons.

Aircraft - Based on growth in commercial aircraft, the use of aluminum castings in these applications is expected to grow 9% this year to 60,000 tons.

Instruments - Aluminum casting consumption in photocopying equipment and in scientific, optical, analytical and measuring and controlling instruments is expected to increase to a peak of 94,000 tons in '98.

Copper Alloy Castings

Shipments of copper-base castings are expected to reached 307,000 tons '97 and achieve a 1.4% annual growth rate. Stimulated by increased use in marine hardware, bearings, and industrial valves and fittings, a 7% increase is expected this year to 327,000 tons.

Plumbing and Sanitary Fixtures & Fittings - Bronze castings for pipe fittings, shower fixtures and faucet/sink parts are projected to reach 60,000 tons in '98. A long-term decline of 1.1% per year is forecast.

Industrial Valves & Fittings - Despite continuing imports, copper alloy castings continue to grow at a 0.6% rate per year. Shipments to this market are forecast to increase 8% this year to 110,000 tons.

Zinc Die Castings

The use of zinc die castings in cars and trucks continues to decline. A long-range rate of decline of 4.4% per year in motor vehicle consumption is forecast.

Total shipments of zinc die castings in '98 are expected to reach 369,000 tons and decline to 320,000 tons during the next 10 years. The hardware, plumbing fixture and building tool market sector continues to use more than 100,000 tons of zinc castings per year.

Magnesium Die Castings

The use of magnesium die castings continues to grow as new automotive applications develop. Weight reduction is now paramount, and despite a greater price variance between aluminum and magnesium, the use of magnesium continues to increase.

The auto market is expected to consume 13,000 tons of magnesium castings this year. Another 10,000 tons will be used in chainsaw and power tool applications. Total magnesium casting shipments are forecast at 38,000 tons in '98.

Other Nonferrous Castings

The long-term growth for shipments of nickel and cobalt alloy castings in pump and valve applications is nearly 5% per year. Applications in desalination and chemical plants and in offshore drilling show the greatest growth potential. An 11.7% per year growth in titanium in aircraft use is also projected. The total market is presently 46,000 tons.

Investment Castings

Investment castings are forecast to grow from 154,000 tons in '97 to 170,000 tons this year. The main commercial applications continue to be in valves and pumps in stainless and carbon steels, as well as in superalloys for turbine blades and vanes.
COPYRIGHT 1998 American Foundry Society, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1998, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:forecast on foundries in 1998
Author:Kirgin, Kenneth H.
Publication:Modern Casting
Date:Jan 1, 1998
Previous Article:Mission building - the work begins.
Next Article:Implementing a water-based shell mold system.

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