Foundry Services Market is Anticipated to Witness High Growth Owing to Increasing Demand from Automotive Industry

The foundry service market involves the process of metal casting to manufacture metal components. Foundries provide casting of ferrous and non-ferrous metals to produce components for automotive, industrial machinery, construction, mining equipment, and agriculture industries. Foundry services help manufacture complex metal parts that are difficult to fabricate through conventional metal forming techniques. The growing automotive industry has significantly driven the demand for casting of aluminum and iron components used in engine blocks, transmission cases, and other structures. Foundry services offer casting solutions tailored to specific customer requirements in terms of design, material composition, surface finish, dimensional tolerance, and output. They employ sand casting, die casting, and other casting techniques in iron, steel, aluminum, magnesium, and copper-based alloys.

The Global foundry service market is estimated to be valued at US$ 126.27 Bn in 2024 and is expected to exhibit a CAGR of 6.8% over the forecast period 2023 to 2030.

Key Takeaways

Key players operating in the foundry service market are Nemak, Waupaca Foundry, Inc., Hitachi Metals, Ltd., Bharat Forge Limited, Alcoa Corporation, Thyssenkrupp AG, General Motors Company, Castings PLC, Metal Technologies, Inc., AAM Casting, Grede Holdings LLC, CIE Automotive, Precision Castparts Corp., Reliance Foundry Co. Ltd., Grupo Antolin-Irausa S.A. These players are focusing on capacity expansion plans and strategic joint ventures/acquisitions to enhance their presence across regions.

The growing automotive industry provides significant opportunities for casting components. Foundry service providers are developing advanced sand casting and die casting techniques to manufacture lightweight components for electric vehicles and hybrid vehicles .

North America and Europe are major markets for foundry services owing to strong presence of automotive OEMs. However, Asia Pacific is emerging as a major market with growing foundry industry in China, India, Japan and other Southeast Asian countries. Key players are setting up new facilities or acquiring foundries in Asia to leverage lower costs and closer proximity to automotive customer base.

Market Drivers:
1) Increasing automobile production across the world is a key factor driving the demand for casting components requiring foundry services. Automotive accounts for over 45% of total foundry production.
2) Growing manufacturing sector in emerging economies of Asia Pacific, Middle East, and South America is accelerating the demand for cast metal components from foundries.

Market Restrains:
1) Volatility in prices of raw materials such as ferrous and non-ferrous alloys increases production costs for foundries.
2) Stringent emission norms require foundries to invest in pollution control equipment increasing capital expenditure.
Segment Analysis

The foundry service market is dominated by ferrous metals sub segment. Ferrous metals such as cast iron, steel etc. accounts for over 65% of the total foundry service market share. Ferrous metals foundry casting dominates due to its widespread applications in automotive, machinery manufacturing industries. It offers benefits such as high mechanical strength, recyclability and cost effectiveness which makes it preferred choice for heavy duty machine components and auto parts which needs to sustain high load and stresses. The automobile industry consumes around 45% of total ferrous metal casting due to demand for parts like engine blocks, heads, transmission cases etc. Machinery manufacturing industry requiring components like housings, gear boxes etc. also relies significantly on ferrous metal casting through foundry services.

Regional Analysis

Asia Pacific region stands as the fastest growing as well as dominating region in the global foundry service market. The growth is driven by presence of countries like China, India, Japan, South Korea with large manufacturing industries specially automotive. These countries also has strong presence of global automakers as wells as component manufacturers. China alone contributes to over 40% of total foundry service demand. Growth in automobile production and machinery demand in developing economies is further driving the Asia Pacific market growth. North America and Europe are other major regional markets for foundry services due to mature automotive industry and engineering goods manufacturing.