Sand Castings

Global Market Outlook on Sand Casting

• The global castings market is highly fragmented with the major supply bases spread across the US, China, India, Japan, and Germany

• The demand from major end uses at a global level has increased, due to the resumption of major OEM industries.

• Zero-COVID policy and energy crisis across European countries have created impact on the supply market; thereby causing lead time delays and price increase

Global Sand Castings Market Maturity

• China contributes to nearly 44–48 percent of the global sand castings production. In case of ferrous castings, China is followed by India, whereas the US takes the second position in producing non-ferrous castings

• In general, the sand casters are small and medium-sized enterprises

• Automobile and industrial machinery are the two major end-use industries, which serve as key demand drivers for the sand castings production

Global Sand Castings Industry Trends

• The global Sand castings market is fragmented, and the foundries compete by offering various additional services and differentiate themselves amongst peers on cost and product quality

• The developed nations, such as the US, Germany have stringent environmental regulations, and hence, the foundries are likely to invest more on environment friendly practices like recycling of sand, usage of silicate binder, etc.

Industry Drivers and Constraints : Sand Casting

Drivers

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, Mexico, and South East Asia, driving the market in the developing regions

Level of Integration

• Level of integration (both vertical and horizontal) at the tier I and II of major OEM industries is gaining attraction among the buyers as a one-stop solution for reducing lead times and providing cost/volume advantage

Emerging Economies

• In emerging economies, factors, such as low cost of labor, growing supply base concentration, etc., are expected to attract OEMs to engage with suppliers in these regions, thereby driving the demand for castings segment

Constraints

Zero-COVID policy in China

• The Zero-COVID policy in China has significantly impacted the casting supply market; thereby leading to lead time delays and supply chain constraints

Energy Crisis

• Energy crisis across European countries has led to increase in manufacturing cost of the products. This in turn has impacted the operating capacity of both OEMs and contract manufacturers.

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 lower volume of raw material purchase. These are expected to impact supplier margins and the final price of a product

Cost Structure: Global

Cost Component

Raw Materials

• Raw material is the major demand driver for castings category. Raw Material cost includes cost of both direct raw materials, such as pig iron, aluminum, etc., and indirect materials, such as sand, resins, etc.

• Prices of raw materials are predominantly determined by exchanges, like LME, SHFE, and COMEX. Raw material price fluctuations within a particular range are typically absorbed by the supplier, which is mutually agreed by both parties as a part of long-term contracts

• Design and complexity of the product, process requirements, wastages, material availability are other key factors influencing the cost structure

Labor

• Most of the casting processes being dependent on manual labor, labor cost becomes the next major cost component in the cost structure. Wages in countries, like the US, Germany, Japan, are higher compared to China, India, and ASEAN countries

• Due to inability to standardize the customer requirements, any increase in the wages is expected to impact the product cost, in turn, impacting the price of the casted product

• Relatively lower labor cost is a key factor supporting emerging sourcing countries, such as Indonesia, Vietnam, Taiwan, etc.

Energy

• Increase in energy cost does not impact the prices drastically and may only show minor regional differences

• In the casting process, the energy cost varies according to the metal used and the type of molding method

Overheads

• Overheads primarily are machinery maintenance cost, administrative cost, transportation cost, packaging cost, duties, etc.

Emerging Trends : Sand Casting

Additive Manufacturing

• An emerging trend in the field of pattern making is the use of 3D printing technology for making the mold, Despite this technology is gaining traction in the developed countries in the West, a majority of the developing economies are yet to catch up. The advantages of adopting this technology would relatively reduce the operational cost. However, still research is being conducted to improve the quality of the mold patterns in terms of surface finish.

Casting Simulation Software

• Development of casting design simulation software’s such as Quickcast, ProCast, Flow 3D cast, etc., has resulted in the reduction of casting defects like shrinkage, cold shut, porosity, blowholes, etc., Simulation based castings is a modern casting technique which is implemented in the design phase to improve the quality of the casted product by suitably designing the mold shape, runner and riser assembly.

Advancements in Binders

• Few sand mixing binders in the market such as ECOLOTEC, GMBOND, etc., are used in the core making process. ECOLOTEC is a odorless binder suitable for Steel/Sand castings which improves the strength of the mold, prevents the emission of hazardous pollutants thereby creating a clean and a safer core making process.

Why You Should Buy This Report

The report gives a regional market outlook of China, Germany, Japan, US and India. It shows the global sand casting market trends and gives the service portfolio and
SWOT analysis of key players such as Hinduja Foundries, Weichai Holding Group Co., Ltd., Hitachi Metals, etc. It breaks down the cost structure and analyzes the price and price drivers. The report gives information about the typical contract structure of the sand casting industry.