Emerald Group Publishing Limited
Copyright © 2004, Emerald Group Publishing Limited
P/M market on the path to recovery...
P/M market on the path to recovery...
Powder Metallurgy (P/M), a relatively young industry, is maturing and entering unknown territory. Since 1980, P/M has undergone an exhilarating stage of double-digit annual growth, establishing itself as a major industry with 400 powder manufacturers, 100 tooling and equipment makers, and 700 manufacturers of P/M parts. Once mostly family-owned, North American P/M began to consolidate in the 1990s with numerous acquisitions. In the 1990s, many overseas firms opened in North America and US firms sought opportunities abroad. P/M sales fell badly in 2000 and 2001. Industry sources blamed the general economic downturn and declines in auto production. In 2002, P/M recovered somewhat, but did not exceed 2000 levels.
According to a soon-to-be-released updated report from Business Communications Company, Inc. (www.bccresearch.com) RGB-041Y Powder Metallurgy, the North American metal powder market was estimated at 1.14 billion pounds worth $2.4 billion in 2003 and is forecast to reach £1.45 billion worth $3.4 billion in 2008. The P/M parts market was estimated at £993 million worth $5.4 billion in 2003 and is forecast to reach nearly £ 1.3 billion worth about $7.7 billion in 2008.
About 90 per cent of metal powders are manufactured into parts, which means that a total of metal powder plus parts shipments would involve double counting. BCC projects that all P/M activity – production of metal powders and parts fabrication (this includes double counting) – totaled roughly $7.5 billion in 2003 and will grow to more than $11 billion by 2008 with a growth rate of 7 per cent annually.
In constant dollars, the P/M industry as a whole will grow with the economy between 4 and 5 per cent annually between 2003 and 2008. Some firms will produce large quantities of P/M parts, which they will sell in very competitive markets at low margins. Others will manufacture smaller quantities of more complex parts with higher value add. Markets for commodity P/M parts will grow slowly, but others, like lawn and garden, are expected to expand rapidly. The bottom line is that substantial growth and profit opportunities exist in P/M.
P/M still has major economic advantages over forging, die casting, and machining. P/M has taken most of the “low-hanging fruit” in automotive, but still can grow at the expense of competing processes, even if the auto industry stays flat over the next 5 years. To do this, P/M must perform high quality finishing or machining operations on its parts at reasonable cost and emphasize customer service and rapid delivery to beat low-priced foreign competition. Some auto manufacturers outsource assemblies to P/M parts manufacturers, which make some parts, acquire others, and deliver assemblies just in time. This diversification means that the P/M parts manufacturer sets up an assembly operation.
P/M can expand in markets like lawn and garden, which is currently growing at double-digit rates. Some industrial markets for P/M require complex parts that meet demanding performance specifications. This means high value added and less competition.
P/M must focus technology on narrowing the gap between P/M parts and those made from solid metal (wrought parts), which have a strength advantage. The industry must also continue expanding alternative parts manufacturing processes. Every advance in P/M technology opens up new markets and opportunities.
For further information, contact: Business Communications Company, Inc., 25 Van Zant Street, Norwalk, CT 06855. Tel: (203) 853-4266, ext. 309; E-mail: email@example.com