POWDERMET2019: State of North American PM industry 2019

July 8, 2019

The outlook for 2019

“Depending upon your market niche,” Sweet stated, “2019 looks like a flat year or modestly down for the press and sinter business. The North American PM industry’s heartland in Western Pennsylvania remains positive, but there is some softening reported through the first quarter. The lawn & garden market is holding up well. So are appliances and construction equipment. Nevertheless, the automotive segment continues to raise concern.”

In September 2018, the MPIF performed its annual PM Industry Pulse Survey.  Of the responding members of the Powder Metallurgy Parts Association, 62% projected an increase in capital spending for 2019, with 31% reporting spending remaining the same as in 2018. Long-standing family-owned PM parts makers are still thriving, Sweet added, with three typical medium size companies in the Midwest and Pennsylvania expecting fairly strong gains this year.

Nevertheless, the metal powder market is uncertain, he said. Some observers believe negative powder shipments, reported during the first quarter of 2019, signal a further weakening market or a slowdown in demand. Caution reigns at best for the remainder of the year.

Sweet added that equipment builders forecast a slower year, with interest in larger compacting presses in the 350- to 550-ton range. The press market seems to be settling into annual builds of 20–25 presses. Automation of presses and robotics in furnace loading continues as a steady trend.

 

The automotive market

The PM industry’s most important market, the automotive sector, was said to be entering a new era. “Everything is changing,” stated Sweet, “the product mix, the demographics of consumers and the trend to hybrid vehicles (HV), electric vehicles (EV), and self-driving or autonomous vehicles. Many observers forecast the PM industry’s major market will slowly decline in the next five to ten  years. This offers both challenges and opportunities for everyone.”

Uncertainty overhangs the business climate for 2019, depending upon what automotive platforms parts makers are supplying. In addition, total North American vehicle sales are expected to fall below 17 million units. Early estimates range from 16.5–16.8 million units.

Traditional passenger car models are also falling out of fashion, especially among millennials. Without a doubt, hybrid and electric vehicles are here to stay. Some predict electric vehicles will account for 10% of the automotive market within the next ten years. Right now there is no practical infrastructure yet for plug-ins, but this will come and the PM industry must be ready. And there is more sobering news, Sweet added, with Norway launching an ambitious plan to offer only electric cars for sale beginning in 2025. The goal is electric, or hydrogen or plug-in hybrids. Currently, 37% of Norway’s automotive market consists of hybrid and electric vehicles.

Electric vehicles offer opportunities for innovative PM designs. For example, soft magnetic composite cores can be used in main drive motors and motors for oil and cooling pumps. While demand for SUVs and light trucks is still thriving in North America, new models contain smaller engines (six and four cylinders) with smaller, more efficient nine to ten-speed transmissions. The result is less weight with fewer connecting rods and main bearing caps, which equates to less powder shipments even though some top-of-line fully loaded AWD trucks contain more than 45 kg (100 lb) of PM parts. The average light truck model, such as the Ford F150, Chevrolet Silverado, or the Dodge RAM 1500 classes, contains about 34 kg (75 lb) of PM parts. The overall decrease in number of cylinders and other lightweighting activities has reduced the average weight of PM parts in North American passenger vehicles to 19.5 kg (43 lb).

It was stated that auto engineers are utilising more modelling of designs and less time-consuming, physical testing to reduce costs and decrease time to market. Adequate data for modelling Powder Metallurgy parts is lacking, said Sweet, and filling this need calls for additional data to be generated and added to the Global PM Property Database.

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