AFS Reports Declining Rate of Imported Metal Castings; Optimistic Outlook for Growth...

AFS Reports Declining Rate of Imported Metal Castings; Optimistic Outlook for
Growth in the Domestic Market

SCHAUMBURG, Ill., April 17 /PRNewswire/ -- A declining rate of metal
casting imports to the U. S. and improved productivity by U.S. metalcasters is
improving the outlook for the domestic metalcasting industry, according to the
American Foundry Society (AFS) Metalcasting Forecast & Trends 2008 report.
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The report indicates that U.S. imports of castings rose 7% in 2007, but
imports are forecast to rise only 5% in 2008 to 3.68 million tons. Although
China continues to lead the world in casting production (with the U.S. ranked
second), the reliance on imported castings is being reduced by a variety of
factors, including rising offshore production costs and increased focus by
China and India on meeting the needs of their domestic markets.
U.S. sales of metal castings are expected to increase 5.4% to $34 billion
in 2008 from $32.4 billion in 2007, with output rising 3.7% to 13.8 million
tons in 2008. The AFS report shows a continuing shift in the types of cast
materials, with gains forecast for ductile iron, magnesium and aluminum, while
steel and gray iron shipments will decline.
"We are beginning to see a shift in U. S. buyers using domestic producers
rather than foreign sources. The U.S. is producing more castings today than
in 1991 despite a decrease in the number of plants," said Alfred Spada, AFS
director of marketing, communications and PR. "Over the last 15 years we have
seen tremendous growth in domestic production of magnesium and aluminum
castings and remarkable improvements in productivity."
There are 2,170 metalcasting plants in the U. S. today, compared with
3,200 facilities in 1991. However, from 1991 to 2007, aluminum casting
production grew by 91%, from 1.1 million tons to 2.1 million tons, and
magnesium production grew 331%, from 29,000 tons to 125,000 tons.
Much of the growth in domestic aluminum and magnesium castings is being
driven by increased use in vehicles, as automakers try to reduce weight to
improve fuel economy and overall performance. The use of aluminum castings
per vehicle doubled between 1992 and 2007 from 130 pounds to 260 pounds as the
alloy was used more extensively for engine blocks, cylinder heads and
suspension components. Magnesium is expected to have even greater growth on a
percentage basis over the next 10 years, increasing from 15 pounds per vehicle
in 2006 to 45 pounds per vehicle by 2017.
Looking at the world market, Spada explained that a combination of rising
wages, productivity problems, labor intensive cleaning operations and a slower
conversion to technology are affecting Chinese exports. "For example, China's
overall production of castings is about twice the tonnage of U. S. producers,
but they have 10 times as many facilities."
Interviews of casting end-users and econometric forecasts support optimism
for gains in many market sectors for the next two years, as well as long-term
growth. The AFS report predicts U.S. metal casting sales will grow to $42
billion in 2017.
Nonetheless, the difficulty of matching projections with market realities
is illustrated by some key indicators from 2007:
-- Imports for light vehicles-Forecasted at 21% of demand; actual was 24%
of demand
-- Medium to heavy trucks and trailers-Forecasted a 15% reduction (420,000
trucks/260,000 trailers); actual was a 25% reduction (370,000
trucks/229,000 trailers)
-- Ductile iron pipe-Forecasted 2.3 million tons; actual was 2.07 million
tons

The AFS report has a variety of statistics and data, including forecasts
for shipments in 18 end-use industries, U. S. industry demographics, worldwide
labor rates and historic trends in metal casting shipments. This annual
resource for foundries and suppliers was developed for AFS by Stratecasts,
Inc.

To order a copy of the report, visit
http://www.afsinc.org/2008forecastandtrends

Headquartered in Schaumburg, IL, AFS is a not-for-profit technical and
management society that has existed since 1896 to provide and promote
knowledge and services that strengthen the metalcasting industry for the
ultimate benefit of its customers and society.
SOURCE American Foundry Society

David Krugman of American Foundry Society, 1-800-537-4237, ext. 286,
david@afsinc.org