Casting is a process where a metal is treated with heat to reach its boiling point, liquefy, and the liquid material is poured into a mold that contains a hollow cavity of the shape which is desired upon the solidification of the metal. Forging is a process of applying pressure on metals and pressing or hitting it, thereby changing and altering their shape. Stamping is a process that converts flat metal sheets into specific shapes using various techniques like blanking, punching, bending, piercing, etc. The major difference between forging and stamping is in its application. Forging is used for processing metal parts where the thickness of the metal is changed in the process. In the case of stamping, the thickness remains unchanged. It is essentially a process of cutting metals.
The global metal casting, forging and stamping market as estimated at USD 397 billion in 2020. The market is projected to grow at a CAGR of 5.1%. The automotive sector and the aviation sector are two of the major consumers of casting forging and stamping industries and the growing demand for EVs is leading to new and innovative requirements for metals and light metal stamping and cast parts. With the requirement for lightweight metal stamping, die casting of auto parts are also on the rise. This is fueling the demand from casting, forging, and stamping industry. On the other hand, COVID protocols have put a limitation on air travel. Hence demand from the aviation industry, both from new production as well as from a replacement perspective has significantly reduced. However, the demand is expected to improve during the period of forecast.
From a material perspective, the type of material which is used in casting, forging, and stamping can be divided into two categories. They are ferrous and non-ferrous metals. As of 2020, the industry consumption for ferrous casting is 68.4 million metric tonnes while non-ferrous casting consumptions are a meager 6 million metric tonnes. Consumption of ferrous casting is expected to grow by a CAGR of 4.7% while the consumption of non-ferrous casting is expected to grow by a CAGR of 3.5% CAGR during the period of forecast (from 2020 to 2025).
The end-user industries for casting, forging, and stamping industries are witnessing a rise in the demand for lightweight materials, automotive industries particularly driving this requirement. Such requirements are slightly different from the traditional casting, forging and stamping requirements, and companies operating in the industry for the same are required to adjust their approach while dealing with lightweight materials. Geographic trends industry expansion in countries like India and Germany and the emergence of emerging technologies like 3D printing, sand blinders, and material handling robots are helping reduce the cost of manufacturing, speeding up the process of casting or stamping or eliminating human error thereby reducing wastage.
The industry, in general, is reaching maturity. The number of iron and steel factories has declined over the years. Major regions like China are reaching market consolidation stages while other prominent countries like the US and Japan are witnessing industry contraction.
The industry for casting stamping and forging is undergoing severe change post the COVID pandemic. With the aviation industry, which was one of the primary end-users of casting and forging, operating at low capacity or having stopped new orders, the overall industry consumption has shrunk post-2020. In addition to the reduction of orders, the lead time for orders has also increased. For example, lead time for simple components pre-COVID averaged at 4 weeks has increased to 6 weeks. Similarly, lead time for medium complexity components averaged 12 weeks in a pre-COVID era. Now, lead time has increased to an average of 16 weeks post the COVID pandemic. The contract structures have also changed during the last two years. While multi-year contacts were a common phenomenon, especially for the energy industry, in the pre-COVID era, the industry scenario has significantly changed. Now, end-users prefer short to medium-length contracts with the emergence of one-time contracts coming into prevalence.
The key manufacturers for Alcoa Corporation, Aludyne, Inc., Bharat Forge Limited, Sumitomo Corporation, Meridian Lightweight Technologies, DAYTON Lamina Corporation, Doncasters Group, Georg Fischer Ltd., Interplex Holdings Pte. Ltd., Magna International Inc., Precision Castparts Corp., SeAH Besteel Corporation, Shiloh Industries Inc., Voestalpine AG, Worthington Industries. The industry has a fair mix of global as well as local and regional players. However, the industry leans towards a consolidated structure despite the presence of several local players. China, the largest industry for casting, forging, and stamping is making efforts to consolidate its market space.
Direct material cost is the highest cost component for the forging, casting and stamping industry. It makes up over 40%-55% of the overall cost depending upon the type of metal used. Apart from direct material costs, labor cost is the second-highest cost component. Grand View Research will help our client identify the best-suited suppliers by mapping their core capabilities and operational efficiency.
Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process
Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier
Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.
A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.
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