Forgings Market to Reach 34.94 Million MT by 2022, Says Beroe Inc

RALEIGH, North Carolina, Oct. 15, 2019 /PRNewswire/ -- The global market production of forgings is currently estimated to be 30.19 million MT, growing at a CAGR of 5 percent till 2022, according to Beroe Inc., a procurement intelligence firm. Approximately 40–45 percent of forging units are currently observed to be running at less than 90 percent capacity. The market is primarily driven by demands from the automobile end-user segment.

At a global level, China dominates the forgings market with a 33 percent share of overall production, followed by Europe with a 21 percent share, and India with 11 percent. China's share is expected to reach 38 percent by 2020, with Europe reaching 25 percent, and India reducing to 8 percent. Latin America is expected to witness significant growth by 2022 due to the high demand in the end-use market with the contributing countries consisting of Brazil, Argentina, and Columbia.

https://www.beroeinc.com/category-intelligence/forgings-market/

Beroe, which is based in North Carolina, further stated that procurement experts can access this report on its recently launched market intelligence platform Beroe LiVE: live.beroeinc.com

The automotive and aerospace industry is the top end-use market (50 percent) for forgings across regions, accounting for 50 percent of the demand and driving the growth of the market. Other major end-use sectors include the machine tools industry (9 percent), agricultural and construction machinery (9 percent), construction (8 percent), and energy (8 percent). Constraints for the forging industry currently include slow demand, foreign competition, energy costs, availability of labor, availability of capital, and raw material lead time.

The process of powder forging, a forging technique for products requiring variable material composition, is rapidly expanding in developed nations and could emerge as key technology in the upcoming years, despite being in nascent stages across developing countries. The development of graphite free lubricants is emerging as a popular trend since lubricants are important cost-saving levers in die forgings that can help improve ease of operation as well as increase die-life, significantly improving cost savings.

Key Findings:

• In the current scenario, buyers enjoy high bargaining power, due to low global capacity utilization of forge-shops. Buyers have the opportunity to lock-in contracts at present, utilizing the prevailing market conditions of high supply and low steel prices.
• Suppliers, in general, prefer advance payment through bank transfer, typically 30 percent on order placement and remaining before shipping. Relevant duties, subsidies, and taxes are calculated to complete the quote.
• The share of North America in the global forging production has witnessed a marginal decrease, due to shifting of production base to low-cost countries such as China, mainly due to the cost attractiveness and less stringent regulations in Asian countries.
• The stiff competition for forge-orders would, at present, make an entry for non-specialized forge-shops unviable. High equipment costs, certification requirements pose significant entry barriers although financing schemes offered to SMEs in certain countries aid entry.
• In the automotive industry, contracts are typically long-term, around 3 years in duration, with a repeat order cycle and yearly price revision for auto engine components. In non-automotive industries, the contract duration is typically based on order size and are mostly one-time orders with quarterly or bi-annual price revisions. 

The research methodology adopted for the report included:

• Experts with twenty years of domain experience
• Interaction with buyers
• Inputs from supply chain partners

The main cost drivers for forged components are raw material, such as steel and aluminum, and energy, as these account for nearly 80 percent of the total costs. The grade of raw material used is important and can cause significant changes to cost structure with variations of 45 to 60 percent of the total cost. The number of pieces produced also affects the cost structure and total costs. Typically, a 10 percent rise in material costs leads to a 6 percent hike in total costs.

The report also includes:

Market Analysis:

• Global Forgings Market Analysis
• Regional Market Outlook
• Porter's Five Forces Analysis

Supply Analysis:

• Key Global Forgings Supplier Profile
• Supplier SWOT Analysis

Technology Trend:

• Technology Trend Analysis
• Emerging Technologies

Supply Chain and Contract Structure:

• Supply Chain
• Production Value Chain Analysis

Cost and Pricing Analysis:

• Cost Structure
• Cost Drivers: Raw Materials, Electricity, and Labor

About Beroe Inc.:

Beroe is the world's leading provider of procurement intelligence and supplier compliance solutions. We provide critical market information and analysis that enables companies to make smart sourcing decisions—leading to lower costs, greater profits and reduced risk. Beroe has been providing these services for more than 13 years and currently works with more than 10,000 companies worldwide, including 400 of the Fortune 500 companies.

To learn more about Beroe Inc., please visit: http://www.beroeinc.com

Media Contact:

Debobrata Hembram
[email protected]

SOURCE Beroe Inc.