Continued from pg 17


Industrial Gas Turbines The International Energy Association (IEA) noted that


the macroeconomic


shock due to the corona virus pandemic is unprecedented in peacetime, with deep effects on global power demand. First quarter worldwide demand was off by 2.5% when compared with Q12019. This was most strongly experienced in China, the first country to implement containment measures, where the decline in demand is estimated at 6.5%. In other parts of the world, where restrictions began in March, the demand for electrical power fell by 2.5% to 4.5%. These declines are partially attributed to the milder weather in January and February. After China, regions most greatly affected, in descending order, include Europe, Japan, Korea and the United States.


On a daily basis, full lockdown


measures have pushed demand down by 20% or more, with smaller effects for partial lockdowns. After correcting for


weather effects, full lockdowns


have reduced daily electricity demand by at least 15% in France, India, Italy, Spain, the United Kingdom and the US Northwest. Italy saw demand plunge by more than 25%. The services sector has been hit


hardest by lockdown measures, as retail, office, hospitality, education and tourism activities were almost completely shut down in many major economies. The impact on demand was less significant for the industry sector on average. Many factories have been able to continue operations by applying precautionary measures to protect workers.


Residential electricity demand has increased in most economies as a result of lockdown measures, with most people spending more time at home. In the last week of March and first week of April, residential demand during the week was up to 40% higher across certain European economies than in the same weeks in 2019. The IEA expects global electricity demand to fall by 5% in 2020, the largest decline since the Great Depression. This


18 ❘ June 2020 ®


would be eight times the reduction in 2009 due to the global financial crisis. Power Magazine and other analysts hold a similar view. In the January forecast, our expectations were that the demand for IGT casting would grow by approximately 8%, as the industry was in recovery. Based on the current global situation, feedback from foundries, and analyst data, we have revised our 2020 forecast to reflect a 5% decline from 2019, with this year’s investment casting sales totaling $725 Million.


Automotive Until this year, the record low for monthly automotive sales was set in January 2009, when sales fell to 650,608 units (ref: Bureau of Economic Analysis). April 2020 broke this record when sales continued to nosedive from February and March levels of 1,425,494 and 903,194 respectively, dropping to an estimated 633,000 passenger vehicles. “April auto sales took the biggest


hit we’ve seen in decades,” said Jessica Caldwell, Executive Director of Insights - Edmunds. “These bleak figures aren’t just because consumers are holding back on their purchases — fleet sales are seeing an even more dramatic drop as daily rental business has dried up. Like many other industries, the entire automotive sector is struggling as the coronavirus crisis continues to cripple the economy.” Although changing on a monthly


basis, there is consistency among what we are hearing from analysts. This is going to be the worst year for US domestic automotive sales since 2010, where the low point was 11.6 million as the industry emerged from recession. Five months into the year, analysts are predicting 2020 automotive sales are expected to range somewhere between 12.4 and 13.3 million units, representing a 22% to 27% decline from 2019’s 17.0 million.


This is the lowest point the industry has seen since the 11.6 million cars and trucks sold in 2010 as the industry emerged from recession. Between


shelter-in-place orders,


social distancing, and the unemployment rate surpassing 25%, it seems that the only way to safely buy a new car nowadays is online. Clearly the market for automotive castings are taking a significant hit this year, and as the situation has worsened month after month. Based on analyst projections and feedback from foundries working in the automotive space, we are estimating that 2020 investment casting sales will decline approximately 25% to $320 Million.


General Industry As I have noted in the past, aggregate sales of general industrial casting sales generally track to the US Rate of Industrial Production. As one can expect, this metric took a 4.9% nose dive in March and in April showed a further decline of 11.2%. As various regions resume


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