editorial E
Don’t Come Up Short
Y ‘‘ ou and your casting
providers are in a unique supply situation. While the overall global economy is trying to
stay afl oat, most metalcasters (at least in North America) are running their operations at or near current capacity. T e result is that many of you are incurring signifi cant lead times (I have been told more than 16 weeks in some markets) before you receive your cast components. To relieve this situation, metalcasters could expand the capabilities of their operations and thus their capacity. T ey could add more employees and a second or third shift. T ey could add more molding lines, furnaces, fi nishing equipment, etc. Some have started these additions, but many have held back. Metalcasters that have held back often cite their need to recoup their losses from the recent recession. Many say they are waiting for some stability to be achieved in the economy and with
Forecasts show 7-10% growth in U.S. casting shipments per year for the next several years. Coupled with global production growth, this is going to put a strain on raw material supply.”
their customers to ensure long-range orders and the confi dence to reinvest. While we all hope this stability and confi dence
builds over the next few months, our feature article on page 20, “Will Casting Materials Aff ect Your Bottom Line?,” adds another storyline to the supply of castings in the future. Metalcasters across the globe are concerned about the availability of the raw materials necessary to manufacture your cast components. It is important to state up front that there isn’t
currently a shortage of raw materials. Metalcasters are able to source their steel scrap, pig iron,
aluminum, copper, sand, etc. But, the industry only has begun its recovery from the recession. T e estimated 10% growth both last year and this year are just the start, as forecasts from the American Foundry Society show 7-10% growth in U.S. casting shipments per year for the next several years. Coupled with global production growth, this is going to put a strain on raw material supply, and it is going to increase the cost of producing castings. “In the scheme of things, the foundries are a very
small component. We have zero infl uence on the pricing of [most] commodities,” said Robert Peaslee, president, Manitowoc Grey Iron Foundry. “T ey are driven by other industries that use far more, and we just have to sit here and grin and bear it.” For iron and steel casters, the metal supply is driven
by the needs of steel mills. For sand casters, today’s availability of silica sand is driven by the oil and gas industry. As the needs of these global markets go, so goes the availability and price of raw materials crucial to casting production. As casting buyers, it is critical for you to understand these trends and how they will aff ect the price you pay for your castings. “[Our} ustomers don’t like price increases…and
they pass on what they can to their customers,” said Richard Henning, president, Belmont Metals, Inc. If the metalcasting industry continues to move
forward as forecast, you can expect this trend to continue to aff ect you as well.
Alfred Spada, Publisher/Editor-in-Chief If you have any comments about this editorial or any other item that appears in Metal Casting Design & Purchasing, email me at
aspada@afsinc.org.
Sept/Oct 2011 | METAL CASTING DESIGN & PURCHASING | 7
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