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USA - The giant resurfaces.

Issued at 2013-05-28



Metal casting sales in the United States of America increased 16.8% in 2011 to $29.93bn and are expected to grow another 27.8% up to 2015, MODERN CASTING recently reported. The recovery from the horrors of the economic downturn which raged for two years from 2008 was initiated in 2010 when sales started to grow thus maintaining the North American nation as a giant in the global foundry industry, with production tonnage figures second only to China.

With confidence high, the 2013 Metalcasting Forecast and Trends Report, published by the American Foundry Society, predicts sales figures will reach $38.26bn by 2015 across all sectors. The report says ductile iron, steel, aluminium, magnesium and copper-based alloys witness the greatest opportunities for long-term growth. Ductile iron growth is led by the pipe, oil and gas, machine tool, valve and automotive markets with the increase in steel castings dictated by the oil and gas, valve, pump and compressor, railway and mining markets.

The resurgence in the automotive and general transport markets will drive growth in the non ferrous sector, whilst the valve, pump and compressor and plumbing markets will provide continued demand increases for copper-base alloys.
Although there has been a decline in the number of US foundries (from 2,336 in 2008 to the current 2,001), the report claims the recession is not the culprit for their demise. Moreover, advances in technology, international competition and tighter regulations are blamed for the closures – elements of business the whole industry is facing up to on a daily basis.
Indeed the CastExpo exhibition (St Louis, USA, 6-9 April 2013) highlighted the level of technological advances needed for a foundry to remain successful during an age where technology is growing at as fast a pace as it ever has done. Exhibitors and delegates told Foundry Trade Journal editor Lynn Postle that US foundries were embracing advances in materials, processes, equipment and business initiatives and that the recovery was in part being led by investment in new technology.
The old-fashioned attitude of shunning so called emerging nations and relying on a history of quality and deliverables are no longer the ‘norm’ in the US with foundries now working alongside their Chinese counterparts on collaborative projects and tackling the new dilemma of satisfying a global demand situation that looks likely to challenge capacity for those who haven’t fully understood the need to get on board with the latest production improvements to remain sustainable in to the future.
Capital investment is once again at the forefront with exhibitors claiming to have had a much better show than for many years in terms of genuine interest and reported more buoyant order books than in the past few years.
The main threat continues to be from competing engineering disciplines rather than low-cost economies, which are now suffering the inevitable demands of nations keen to enjoy the remuneration and material benefits of their western counterparts.

During a packed audience for the Hoyt Memorial Lecture, Eugene Muratore of Rio Tinto & Titanium America spoke of the common themes for successful foundries in the US and the rest of the world and how they would require cultural changes to take place. He quoted several key factors for success – education, research, recruitment and retention, safety, marketing and service. “We are a technology based industry and are totally dependent on the next technological advances,” he said. “We want to go forward and learn new things.”

Quoting another legend in the American foundry industry – Keith Millis of the International Nickel Company – from a presentation he gave at a joint conference on ductile iron in 1975, he said the metal casting industry should consider matching the level of funding that other industries, such as welding and powder metals, spent on research. He told delegates: “A similar challenge today, nearly 40 years after that presentation, yields the following:
• US foundry annual sales approach 10 million tons
• Assume an average selling price of $2900/nt
• US foundry annual sales approach $29 billion
• 1% of sales invested in research - $290m
• 0.01% of sales invested in research - $2.9m
• 0.001% of sales invested in research - $290,000
Recall that the average research budget for the American Foundry Society over the past five years has been $78,000. A budget of 0.001% of sales would quadruple the research finding.”

He spoke of how new blood was needed to drive research and development and indeed the whole industry forward. “The metal casting industry has embraced IT for many years but we are desperately in need of more graduates from the science, technology, engineering and maths disciplines. China produces 20% STEM graduates, Europe 12-15% but in the US we only generate 5%. Why don’t we attract engineers?” The question struck a nerve with the audience of devoted metal casters, many of whom, including Muratore himself, hailed from the Foundry Educational Foundation. The issue remains a critical one for the North American foundry industry where, like much of the rest of the world, other professions are proving more attractive to the next generations. Many of the exhibiting companies said attracting future engineers was a problem as mighty as keeping abreast of the latest environmental and quality standards legislation and meeting customer demands.
Muratore’s answer is to spread the word, “Tell your banker, your neighbours, everyone what we do. We all have to be involved. We need engineering solutions to the world’s problems, by problems I mean opportunities,” he told delegates.

Fellow stalwart of the North American foundry industry, Paul Mikkola shared his extensive experience of 46 years in casting manufacturing at the World Foundry Organization Technical Forum, held in conjunction with CastExpo and the Metalcasting Conference. He said real innovation is “getting great ideas not writing progress reports.” He told delegates to believe in data and trust science but he also warned that false knowledge is much more dangerous than ignorance. “Our industry is made up of small companies lacking resources,” he said. “We need and thrive on collaboration; sharing, building, understanding and commitment amongst the industry is crucial. Teamwork gives results and as a group we are more successful than individuals.”

“Nothing sells better than success,” said Chris Norch, president of Denison Industries which is why he and many others in the US metal casting industry are part of a group stating the industry’s case on Capitol Hill among the corridors of power in Washington DC. “We are trying to work to bring jobs in.” In terms of a sustainable future for the industry in the US, he said: “We need to build relationships, develop a solid foundation for the issues, promote our message, create an effective and reliable communications network and engage with the media.”

In terms of competition from fellow metal casting nations, MODERN CASTING editor Al Spada told delegates at the recent South African Metalcasting Congress held in Pilanesberg (South Africa) that casting imports to the US had risen from 7% in 1998 to 24% just before the economic crisis in 2008, they currently stand at 22% and account for 2.82m tonnes. By far the largest importer to the US is China, making up almost a quarter of the imports with a 24.2% share, followed by the rest of Asia (19%), Brazil (10.9%), India (10.6%), Mexico (9.8%), Canada (9.8%) Europe (9.5%) and other nations (6.2%).

Despite this there was much talk on the CastExpo floor of a move back to the US from OEMs although, like his fellow countrymen, Spada is shrewd enough to recognise that this is hardly the beginning of a return to the heady days of global casting domination. The number two slot in terms of global casting production was regained by the US in 2012 having slipped to third behind India in 2010 and 2011. So things are looking up, however, as we all know, it’s not about what product you make but about what profit you make! The signs are there that this powerhouse of metal casting is on the road to recovery albeit a long and arduous journey with plenty of route choices on the way.


Source: Modern Casting



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