FSC: The Trend of Castings Procurement May Be a "U-Shaped" Curve With Slow Recovery

The 30th Global Foundry Sourcing Conference 2023 was successfully held in Qingdao recently. The event was organized by the Foundry-Suppliers.Com (FSC) and Suppliers China Co., Ltd. (SC), attracting numerous buyers to attend the conference, which includes  ZF、GE、HITACH、Carraro、CLAAS、LEMKEN、Meichen、Flsmidth、LASKA、Ropeblock BV、Franklin Electric、SCREW、URV、Fisher Jeon、ATG、MES、NOVA/TCB、Techno、TSA、IBCC、Effort Machining、PAN JACK INDUSTRIAL、FUSHENG .In terms of buyer industries, the main focuses are automobile, agricultural machinery, engineering machinery, mining machinery, pump and valve, ships, oil and gas, rail transit, food machinery and other fields. In terms of product materials, cast iron and cast steel still account for a high proportion, while there is a strong demand for aluminum alloy die-casting.

The organizing committee has invited over 140 outstanding castings production enterprises and supporting service providers to participate in the negotiation. Among them, suppliers such as Qingte Group and Anhui Shantin Mechanical & Electrical Inc held exclusive product promotion meetings to introduce the company's research and development capabilities, software and hardware strengths in detail.Chairman Tao Qirong of Anhui Chenguang High Wear-Resistant Technology Co.,Ltd. focused on introducing black metal liquid critical overpressure forming technology. Deputy Secretary-General Li Guoliang of Qingdao Foundry Association introduced the general situation of Qingdao foundry industry, which was warmly welcomed by the participants. Some suppliers displayed castings samples of various materials to attract buyers to visit and negotiate, and improved the efficiency of on-site negotiations between buyers and suppliers.

Returning to the beginning of the year,everyone was full of confidence and and had high expectations for 2023 when the epidemic was just released. Unfortunately, the castings order has fallen sharply in recent months, everyone is generally worried about whether the traditional orders suddenly transferred to Southeast Asia,FSC in April during the Shanghai meeting expressed the view is that China will always function as the global center for casting supply in the foreseeable future. and there are other reasons for the decline in orders.

In his opening speech, Wang Longhe, the head of FSC said that the current casting procurement volume of multinationals has decreased by one third to one quarter, traditional orders are transferred to Southeast Asia with relatively small volume, multinationals considered more strategic layouts according to the FSC research on buyers and casting suppliers in the Global Casting Purchaser Database. The main reasons for the contraction of orders we analyzed as follows:

1. The global economy is weak, and the European and American economies are affected by high inflation and interest rate hikes, resulting in insufficient overall demand.

2. Strengthening trade protectionism policies.

3. It takes time for multinationals to drain inventory. Due to the pressure of production and delivery caused by control measures during the COVID-19, multinationals have taken measures to increase the resilience of their supply chains by making sufficient plans and preparing goods in advance. Many multinationals have not yet drained inventory due to the long procurement cycle and the global economic downturn, which has led to a significant decline in demand for most products at this stage. It happens in other industries.

FSC predicts that the casting procurement rebound is less likely in the fourth quarter of 2023, will gradually return to normal demand in the first quarter of 2024. The trend of castings procurement may be a "U-shaped" curve with a slow recovery, the overall trend is good.

FSC proposes that in addition to traditional manufacturing powers, emerging economies have strong demand. With the comprehensive decoupling between Western countries and Russia, Russia and China strengthen cooperation, which is a good chance for Chinese casting enterprises.

FSC has always carried out strict audits on buyers, inviting only high-quality buyers to bring procurement projects to connect with outstanding domestic foundries. The participating casting buyers are mainly multinational groups, overseas buyers, procurement centers, and key enterprises. During the afternoon negotiation session, negotiation tables were set up around the buyers to conduct face-to-face negotiations with suppliers and filled with the joy of harvest.

There are both opportunities and challenges, difficulties and hopes. In this special period, FSC will go all out promoting the development and transformation of foundry industry. 

Suppliers China Co., Ltd.