“The sunshine is finally shining through on our industry,” declared a confident Jim Trombino, executive director and CEO of the Metal Powder Industry Foundation (MPIF), during the kickoff of PowderMet 2010 in Ft. Lauderdale, Fla. While he by no means suggested a return to the “fat years,” when business conditions for manufacturing were much more favorable, Trombino did say the clouds that are currently hanging over the industry appear “less ominous.”
A cursory study of the end-of-year 2009 numbers supports Trombino’s optimism. According to MPIF data, the industry slowly began turning the corner, with a 28% rebound in iron powder shipments in the second half of the year. On the down side: total iron powder shipments declined 25% from 2008 to 222,118 mt (244,839 st), levels not seen since 1992. Essentially, contends, Mike Lutheran, MPIF president, the industry hit “rock bottom” in 2009, marking five years of dwindling powder demand. During this tumultuous period, no sector was spared – metal powders, equipment, and parts were all impacted. It’s not unlike what other manufacturing- and raw materials-related industries had to endure.
Fast-forward to 2010, where the strong rebound of last year’s fourth quarter has continued into the first quarter of the year. During this period, iron powder shipments soared 64% above the same period in 2009 to 80,206 mt, according to MPIF statistics. Projected annually, the first quarter’s average monthly shipments of 26,935 mt could very well translate into shipments exceeding 317,520 mt.
While many current economic metrics both in and outside key manufacturing sectors support the general consensus that a tepid global recovery is presently under way, several questions remain. The first is the issue of the overall “strength” of the recovery, meaning its ability to withstand even a meager pullback in industrial and consumer spending and confidence. The second concern is the “depth” of the recovery, meaning the capacity of various players across the manufacturing supply chain to participate in this surge.
A non-scientific poll of several exhibitors on hand at PowderMet 2010 revealed varied responses to these questions. “We’re not seeing a lot of movement on the capital equipment side, but the powder/part guys will tell you business is picking up,” Stefan Joens, sales and contract administrator of Elnik Systems, Cedar Grove, N.J.-based supplier of debinding and sintering equipment for metal injection molded parts. For now, Joens is keeping close tabs on manufacturers eyeing smaller equipment purchases, with the hope that they might buy more as they expand.
Activity in other categories of equipment is starting to quicken. Troy Robinson, international distributor manager for Cincinnati Incorporated, Equipment, summed up the current market for his company’s products (PM presses, lasers, electronic controls, press brakes, and shears) as “not bad.” Looking more far forward, Robinson is counting on a more profound recovery in 2011/12. “Once the equipment purchases go up, it’s a sign that the parts manufacturers are increasing production,” he explained.
For Ostendwalder, another prominent manufacturer of presses for metal powder, the resurgence has already begun. “We’ve seen some positive activity over the past few months,” said Jack Krajcirik, vice president of operations and area sales manager, North America. He’s particularly keen on the demand for high-tech CNC equipment for small complex parts. “There’s a lot of used equipment out there that needs to be replaced.”
The view was much the same at Erowa, the Arlington Heights, Ill.-based company whose forte is tooling, measuring and loading systems. Chris Norman, Erowa’s chief operations officer for North America, definitely felt a sense that conditions are picking up. “It’s certainly much better than it was this time last year,” he said. Then again, noted Greg Wallis, CEO of Dorst, based in Bethlehem, Pa., “anything is better than last year.”
Other vendors seemed to be well on their way. At the Centorr booth, Scott Robinson, market manager, said: “A couple more orders and we’ll be good to go.” Meanwhile, at the Hoeganaes booth, Tim Hale, vice president of marketing, described business as “thriving.”
Momentum hinges on the end-use markets
Many players in the PM and MIM arenas have sufficient reason to be cautiously optimistic about the short-to-medium-term future, given both the statistic and anecdotal evidence supporting an economic turnaround. How that translates into a broader, more sustained rebound hinges largely on the viability of the traditional end-use markets the industry services as well as emerging applications.
Take automotive for instance, arguably the dominant force impacting the PM industry’s financial health and future growth. For the U.S. market alone, MPIF is forecasting 11.5 million vehicles (up from just over 10 million units last year). According to MPIF’s Lutheran, that’s the equivalent of 230,000 tonnes of metal powder parts consumed. More good news: news six-speed transmissions in production have a high powder metallurgy content (somewhere in the 30lb. range), and there’s also promise in newly designed chassis applications, he said.
But it’s no longer just the U.S. or North Americas’ automotive market that bears watching. With the importance of the impact of economies in Europe, Asia, and South America, Lutheran believes our survival as industry players demands that we think and act globally. To buttress his belief, he cited statistics supplied by IHS Global Insight, which forecasts the total world light-vehicle sales to reach 79.6 million units in 2012, including U.S. sales of 15.6 million. If that didn’t get your attention, an official in China in Automotive News magazine reported that country’s annual market for cars, trucks, and buses will reach 30 million sometime in the not-too-distant-future. In other words, don’t neglect export markets.
Other key trends and market sectors worth watching include firearms and medical applications – sectors tailor-made for metal injection molding technologies. In a survey conducted by the Metal Injection Molding Association (MIMA), 77% of the responding companies expect increasing sales in 2010. This despite global competitive pressures, higher raw materials costs, and demanding customer requirements.
Opportunities to grow the MIM business abound. According to MIMA, the annual U.S. MIM market is estimated at $170–$200 million, about the same as in Europe, with the current market in Asia estimated at $300 million. In terms of end product, Europe’s dominant MIM markets consist of automotive and high-end jewelry, while Asia focuses on electronics and consumer products. Globally, the total annual worldwide MIM market is estimated at $640 to $700 million.
Ultimately, experts say, the industry’s future will undoubtedly depend on new technology. Hot isostatic pressing (HIP) for aerospace and energy applications, or new near-net PM applications in oil and gas exploration and land-based turbines come to mind. When it comes to ensuring PM’s future success, Lutheran believes it boils down to leveraging what he terms is the industry’s primary advantage: ingenuity.
“Metal powder producers, equipment makers, and PM parts and products makers are all busy investing in new materials and process improvements,” Lutheran said. “We must never write off the creative resiliency of the PM industry to overcome obstacles.”
Ensuring a More Sustainable Future for PM
If there was any doubt that the topic of “sustainability” 1 was going to be a prominent theme at PowderMet 2010, held June 27–29 in Ft. Lauderdale, Fla., those feelings were instantly dispelled when Andrew Winston took to the stage during the conference opening general session. In his spirited, engaging, and relevant presentation, Winston, president of Winston Eco-Strategies, based in Riverside, Conn., discussed the broad range of forces coming to bear on a host of companies today. Among the drivers discussed: why companies are going green, what they’re focusing on to save money, and how they are investing in green technology to strengthen their businesses. Following are some highlights of the presentation:
“Businesses are continually being asked to take care of various environmental issues: chemicals/toxins; bio-diversity; water; and energy,” Winston said. Beyond the obvious environmental impacts, Winston believes taking the sustainability track saves costs and drives innovation.
Some are already far along the curve. For example, Winston noted, GE has more revenues from wind turbines than gas turbines. Others, such as Walmart, are “driving” the green movement across the supply chain. “Walmart is lowering its carbon footprint, and it is asking suppliers to do the same,” Winston said. “They are setting the standard and enforcing these standards on their suppliers. This is going to ripple across other sectors!”
So what can this industry do to further its development across the green curve? Winston outlined the following strategies:
1. Get lean in key areas such as cooling/heating, fleet, facilities, lighting, distribution, and IT systems2. Get smart: accumulate good data about the impact of your operations on the environment3. Get people engaged so they buy in. More importantly, have a plan. 4. Get creative – rethink traditional ways of doing things. Ask new questions!
Winston’s presentation dovetailed with the launch of MPIF’s Sustainability Initiative at PowderMet 2010. Already a recognized “green” technology (roughly 80% of metal used in PM comes from scrap metals), the PM industry is adopting even greater measures to adopt this global movement across all channels. According to Jim Trombino, MPIF executive director and CEO, it’s not just lip-service. “The greening of our world is no passing fad, but a way of life and a way of doing business,” he explained.
For more on the Sustainability Initiative, please visit www.mpif.org. Also visit www.manufacturing.gov/sustainability to find out what the U.S. government is offering in the way of guidance.
