Transcript North American Investment Casting Industry

INVESTMENT CASTING
MARKET OVERVIEW
NORTH AMERICA
Scott Hanson
President
Auburn Investment Casting
Market Overview 1
Investment Casting Trends
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North American Investment Casting Industry
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“Across the Board” increase in activity
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Foundries & Suppliers are busy
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Raw Material Cost/Availability
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Energy Cost
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Offshore Sourcing
Market Overview 2
Investment Casting Trends - cont’d
 Segment summary
Aerospace – commercial – record level of new orders
military – D.O.D. in transition
 IGT – Significant spare part demand
New Build Growth forecasted for Asia, Mid-East
& Africa
 Automotive - activity in complex applications
& Turbocharger Systems
General Industry – growing with overall economy
Market Overview 3
Market Segments
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Aerospace
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Jet Engine
 Blades & Vanes (Airfoils)
 Integral Wheels & Nozzles
 Hardware and Structures
Airframe
 Hardware and Structures
Missile & Rocket Components
Other Military Ordnance
Market Overview 4
Market Segments
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Industrial Gas Turbines
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Blades & Vanes (Airfoils)
Hardware and Structures
Turbine and Combustor Components
Market Overview 5
Market Segments
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Automotive
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Valves
Turbocharger Components
Complex Powertrain Parts
Chassis Applications - Passenger Car and Motorcycle
Market Overview 6
Market Segments
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General Industry
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Medical Implants, Instruments & Testing Equipment
Industrial Valves / Pumps
Petrochemical
Food Processing
Off-Road Equipment
Firearms
Construction Equipment
Hand & Power Tools
Recreational & Sporting
Market Overview 7
North American IC Industry
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United States, Canada & Mexico
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Approx. 46% of worldwide investment casting production
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130 companies
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170 foundries (not including dental, art or jewelry)
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30,000+ direct workers
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All market segments
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All ‘castable’ alloys
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All size capability
Market Overview 8
North American Investment Casting
2005 Sales ($ Million - USD)
Aerospace
1,600
IGT
800
Automotive
250
General Industry
550
General
Industry
17%
Auto
8%
TOTAL:
Aerospace
50%
$3,200
IGT
25%
Market Overview 9
North American Investment Casting
Market by Alloy Type
Aluminum & Copper:
7%
Titanium:
9%
Steel:
33%
Superalloy:
51%
Aluminum
& Copper
Steel
Titanium
Superalloy
2005 Casting Dollars
$3.200M
Market Overview 10
Worldwide Investment Casting
($ Million - USD)
2005
North America
3,200
Europe
1,700
Asia
2,000
Other
100
TOTAL:
7,000
Market Overview 11
Aerospace - Commercial
Large Transports
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World traffic up 6%
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Load factors & New
Orders at Record Level
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2005-2009 build
forecast avg. 970 / year
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Asian Market Growing
Rapidly
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New Programs
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A380 / 747-8
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A350 / 787
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China Regional
New Aircraft Builds
> 50 Passenger
1200
900
600
300
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
ROM Associates: 2- 06
Market Overview 12
Aerospace – Commercial cont’d
Concerns / Issues:
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Airline losses continue
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High Fuel Prices
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Several US Airlines in Chapter 11
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Airlines adopting the ‘Low Cost Business Model’
Market Overview 13
Aerospace – Commercial cont’d
Business Jets
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New orders up significantly
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Delivery of new aircraft 30% higher
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Corporate ownership/leasing & Fractional Shares
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Increased demand for used aircraft
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Airframe & Engine Manufacturers very busy
Private Jets
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New Market starting to develop
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Low cost replacement for some General Aviation models
Market Overview 14
Aerospace - Military
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Increase proposed for D.O.D
Budget
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Demand for engine spare parts
for Fighter, Helicopter &
Transport aircraft
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Some Advanced Aircraft
Programs being pushed out
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Future Combat Systems
- Smart Munitions
- Lightweight Armament
- Battle Field & Ship Board
Applications
Market Overview 15
Industrial Gas Turbines
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High Spare Parts Demand
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Increase in Aero derivatives
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Growing ‘After Market’
Business
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New Land-based
Turbine Builds – 50MW +
600
Large Frame Growth in Asia,
Mid-East & Africa
300
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Limiting/Competing factors
 Infrastructure for NG
 Price / Availability of NG
0
2001
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Future Technology:
 Wind Power
 Coal Gasification
2002
2003
2004
2005
2006
2-06 Consensus Industry Forecast
Market Overview 16
Automotive
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New Investment Casting Applications
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Design Activity in Commercial Trucks, Passenger Cars
& High Performance Vehicles
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Driven by new emission standards and fuel efficiency
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Turbocharger Demand straining capacity
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Titanium Alloy components growing
Market Overview 17
General Industry
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Dispersed among many casting suppliers
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Wide range of size & alloys
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Applications across all industries
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Many Niche opportunities
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High volume applications susceptible to offshore sourcing
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Overall, should continue to increase with growth in economy
Market Overview 18
North American Investment Casting
2006 Estimated Sales ($ Million - USD)
% Change
Aerospace
1,725
8%
IGT
850
6%
Automotive
265
6%
General Industry
570
3.5%
TOTAL:
3,410
+6.5%
Market Overview 19
Opportunities for Consideration
- Machined Parts
- Finished / Ready to Assemble
- Low Volume & Custom Parts
- Military Munitions & Support Equipment
- Military Spares
- ‘After Market’ for Aerospace & IGT
- Medical Instruments & Testing Equipment
- Conversions from other processes
- Combining Multiple Parts into Integral Casting
- Higher Value Alloys
- Larger Castings
- International Customers
- Die Casting Prototyping
Market Overview 20
2006 Forecast Comparison
% Change
ICI
+ 6.5
GDP
+ 3.5
Ind. Production
+ 3.8
DeWolf - Commercial
+ 4%
SFSA
+10%
BICTA
+ 8%
Market Overview 21
Summary
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Overall North American IC growth will continue
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All Market Sectors will benefit
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Off-Shore Sourcing effect on N. American foundries?
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Some concern with Raw Materials & Energy
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Opportunities for New Casting Applications
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Need to focus on market Niches & Supplying Value Added
Features / Services
Market Overview 22
Acknowledgement
The Investment Casting Institute wishes to acknowledge the
following companies for their contribution to this report.
- Alcoa Howmet
- Blayson Olefines, LTD.
- Doncasters Inc.
- ESCO Turbine Group
- Hitchiner Mfg. Co.
- ROM Associates
Market Overview 23