Machining Market Intelligence

Machining Market Description

The global machining industry is highly fragmented and comprises of several small and medium-scale enterprises offering their services to it. Currently, China holds the highest market share of 22.4 percent in the machining industry. However, the growth rate is expected to reduce, due to factors, like the reshoring trend, increasing wages, and slower economic growth. These factors are compelling investors to look at alternate low-cost locations, such as Vietnam, Indonesia, and Malaysia. By 2020, more conventional machines will be replaced by CNC technology to improve output and precision.

The report covers the regional market analysis of U.S., China, Germany, Japan and India. It also discusses Porter’s Five Force analysis, cost structure analysis and the commodities price trend in the machining industry. The report discusses the key drivers and constraints such as market maturity, outsourcing trends and emerging economies in the global machining market. The report further includes comprehensive industry engagement practices and emerging trends such as 3D Printing/Additive Manufacturing, Robotic Machining and Internet of Things (IoT), that are influencing the machining sector.

Beroe gathers intelligence through primary sources that include industry experts, researchers, and consultants, as well as current suppliers, producers and distributors. Secondary sources can include business journals, newsletters, magazines, market research data, company sources, and industry associations. Following data collation, analysis, and strategic review, the Final Research Report is published on Beroe LiVE.

Report Coverage

Regional Market Outlook- US, China, Germany, Japan, India
Cost Structure Analysis of Machining
Commodities Price Trend
Price Driver Analysis

Machining Market Trend, Analysis & Forecast

Category Intelligence on Machining covers the following

Information relating to market, supply, cost, and pricing analysis
Hard to find data on cost and TCO models, supplier details, and performance benchmarks
Macroeconomic and regional trends impacting cost, supply, and other market dynamics
Category-specific negotiation and sourcing advice

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Executive Summary

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Market Analysis

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Supply Analysis

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Cost & Pricing Analysis

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Best Practices

Global Market Outlook on Machining

The global machining industry is fragmented and currently, China holds the highest market share of 22.4 percent. However, the growth rate is expected to reduce due to factors such as, reshoring trend, increasing wages, and slower economic growth, which are compelling investors to look to alternate lower-cost locations, such as Vietnam, Indonesia and Malaysia
By 2020, more conventional machines will replaced by CNC technology to improve output and precision; owing to the stringent requirement from the end users

machining-market-size

Market Overview-Machining

Asia Pacific had close to 40 percent of the global market share for machining in 2016, and was the largest demand region for the industry

The global machining industry is highly fragmented and comprises of several small and medium scale enterprises that offer their services
With a growing demand from the end-use sectors like automotive and electrical industries, the market is expected to increase at a CAGR of 6–7 percent and reach a value of $320.74 billion by 2018
In 2015, nearly 30 percent of the revenue for the machining services were from industries like heavy equipment, engineered components, watch industries, sub assemblies, defense, marine and medical device machining

Industry Drivers and Constraints

Drivers

Market Maturity: The present technological substitutes like 3D printing and additive manufacturing are yet to be made commercially viable. Lack of viable substitutes are expected to sustain the machining market in the short-term
Outsourcing Trends: Suppliers from traditional manufacturing hubs, such as the US and Western Europe, are setting up manufacturing plants in low cost regions such as Eastern Europe and South East Asia, driving the market in developing regions
Emerging Economies : Competitive pricing for raw materials, low cost of labor, and energy with growth in demand from emerging economies is expected to drive innovation in this category

Constraints

Economic Downtrend:Challenges in the global economic recovery could adversely affect consumer spending. Medical procedures, like surgical replacements, may not be affordable by all sectors of the community. With nearly half of the global demand coming from surgical implants, this may affect the growth of this market
Skilled Labor: With advancement in technology in the industry, there is an increasing need for highly skilled labor. This, combined with a shortage of suitable labor, is expected to constrain the growth of the market
Raw Material : Suppliers are susceptible to commodity price fluctuations (especially for high mix, low volume industries), against which they cannot hedge due to their relatively low volumes of raw material purchase. These are expected to impact supplier margins and restrict the growth of the supply base

Commodities Price Trend: HRC Steel and Nickel

HRC Steel Price Trend

The domestic HRC price is expected to drop. This is due to the cautious buying approach with the volatile trade relations and availability of cheaper imports. The prices are anticipated to remain stable with fears of a possible strike or lockout at U.S. Steel or ArcelorMittal USA lending support, however these labor related strikes are unlikely to cause disruptions
With President Donald Trump’s surprise doubling of Turkey's Section 232 tariff to 50 percent, there is cautious buying. With increase in domestic supply from U.S. Steel Corp, which restarted its Granite City Works in June; and JSW Steel (USA), which will start melting in September at its newly acquired hot-roll mill in Mingo Junction, Ohio, prices are expected to be pushed down further. Moreover the lower lead times and cheaper imports despite the higher tariffs are weighing on the much higher domestic prices and are expected to reach an equilibrium in the medium term
In Q1 2019, prices are anticipated to rise due to higher demand post the holiday period at the beginning of the year. The additional duties will be levied only after a tariff rate quota is exceeded, based on a traditional level of imports

LME Nickel Price Trend

The Nickel LME inventory level is expected to decreased by 2-3 percent M-o-M and average monthly around 217,902 metric tonnes for November 2018. The former demand outlook is now under stronger scrutiny due to weaker Chinese economic data recently while the latter remains a long-term play
LME nickel faces greater downside risks from the decline in demand from Chinese stainless steel mills, against the optimistic demand outlook of nickel consumption in the production of electric car batteries. In addition, there is growing risks that NPI production ramp-ups in 2019 are set to minimize the supply deficit in the global nickel market
Demand continues to exceed available supply, as the result, he nickel market is expected to go into a structural deficit. This will be despite a continued increase in nickel prices that is being driven by a number of factors, including the continuing drawdown of available inventory

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