Forging Ahead

Metal, Machinery and Engineering

The latest World Economic Outlook (WEO) report from the International Monetary Fund (IMF) in October 2014 has predicted the global economy to grow at 3.3 per cent in 2014 and 3.8 per cent in 2015.

Global Outlook Driving Demand

The pace of growth has been uneven across countries, with the US and Asia Pacific seeing a faster pace of expansion, and China still posing strong growth numbers despite a moderation in the economy.

These bright spots are expected to power the global metalworking sector, with demand coming from diverse areas such as infrastructure development, resource exploration and aerospace engineering.

Permanent Magnets

Permanent magnets are made from materials, which are magnetised and retain their own persistent magnetic field. Industrially, they are produced through the process of casting or sintering, from cobalt, nickel, iron and alloys of rare earth elements, as well as naturally occurring minerals.

Permanent magnets are widely used in many aspects of everyday life. These include household equipment, electronic devices, power generators, and car motors, among others. Furthermore, their demand is set to continue growing, with the development of new applications and technologies.

A Transparency Market Research report says global demand for permanent magnets was valued at US$15.32 billion in 2012 and is expected to reach US$28.7 billion in 2019, growing at a Compound Annual Growth Rate (CAGR of 9.5 per cent from 2013 to 2019.

In volume terms, demand was at 650.0 kilo tonnes in 2012 and is expected to be 1,168.7 kilo tonnes in 2019, growing at a CAGR of 8.8 per cent from 2013 to 2019.

According to the same report, China dominated the permanent magnets market in 2012 followed by the rest of the Asia Pacific region. China is further expected to witness the highest growth from 2013 to 2019 – at a CAGR of 9.0 per cent – due to increasing demand from its industries.

Superalloys

Superalloys, or high-performance alloys, are alloys capable of withstanding high stresses, high temperatures, and highly corrosive or oxidising environments. These superalloys usually count iron, nickel and cobalt as their base alloying element, and are used in areas such as aerospace engines, industrial gas turbines and auto turbochargers, where their unique properties are required.

According to a report published by Transparency Market Research, the three segments most responsible for driving the global superalloys market are aerospace, oil and gas, and industrial gas turbines.

Due to strong economic growth and accompanying increases in air traffic rates, airlines across Latin America, Asia Pacific and Africa are expected to expand their fleet to meet demand, providing a major boost to the industry.

Lasers

Lasers are widely used in the metalworking industry for many types for processes, such as cutting, boring and welding. The word laser is an acronym that stands for “light amplification by stimulated emission of radiation” – a process that can create different types of beams through simulated emission.

Optech Consulting reports that the global industrial laser systems market reached a record volume of US$10.7 billion in 2013, up by 5 per cent year-on-year.

While still in positive territory, the 5 per cent growth rate seen in 2013 falls short of the long-term CAGR of nearly 10 per cent the global market has seen in the last 10 years. The slowdown was largely due to weaker demand in the Asia Pacific region, which traditionally accounts for more than half of global demand.

One possible source of future growth could come with the growing trend of miniaturisation, especially in the medical, automotive, and electronics markets. Laser systems can be used for micromachining purposes, often yielding faster and more flexible results.

Machine Tools

Machine tools are used to manufacture metal components of machines through machining, a process whereby metal is selectively removed to create desired shapes. They vary in complexity and are widely used in sectors such as general machinery, automotive, precision engineering, transport and aerospace.

In its report, Frost & Sullivan revealed that the global machine industry earned revenues of US$15.72 billion in 2012. This is predicted to reach US$21.18 billion in 2017. From 2012 to 2017, Frost & Sullivan is forecasting the market to grow at a CAGR of 6.2 per cent, powered by various industries.

Despite the economic downturn, the demand for machine tools is expected to remain strong in emerging economies such as China and India. The increasing usage of advanced materials such as superalloys, is also likely to spur Research & Development (R&D) investment and usage of new machine tools and cutting tools.

Control Systems, Instruments and Diagnostics

Power is nothing without control, the proper instruments and effective diagnostics. Thus, the increasing need for precision and automation, especially in critical sectors, will spur the growth and adoption of new and advanced systems, instruments and interface design to better manage and control industrial production and other system configurations.

Reasons for Optimism

The outlook for the global metalworking industry is an upbeat one, as it looks poised to benefit from both the recovery of the global economy and the expansion of sectors such as aerospace and oil and gas.

Breakthroughs in metalworking technologies, processes and materials are also likely to spark new segments of growth, spurring businesses to upgrade existing equipment for greater efficiency and productivity, or find real-world applications for these varied advancements.

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