In the three years to 2017, the price of heat treatment services will decline slightly as firms continue to adopt robotic automation, and goods manufacturing continues to shift overseas
Los Angeles, CA (PRWEB) December 22, 2014
Heat treatments have a buyer power score of 3.8 out of 5, which reflects favorable negotiation terms for buyers. Heat treatment services change the physical specifications of metals, alloys and other materials by altering their crystalline composition. Foremost, buyers benefit from a highly fragmented market landscape, which provides them with a choice of many suitable suppliers, including large firm TEAM Industries. “Fierce price competition has taken place in the three years to 2014, allowing buyers to leverage their choice of suppliers to obtain advantageous pricing structures,” according to IBISWorld business research analyst Kevin Young. Despite climbing production costs and increasing demand from the automotive and construction industries, the price of heat treatment services has fallen overall due to the emergence of automation in the market, allowing suppliers to generate more revenue per employee. Furthermore, stark declines in the price of natural gas in 2011 and 2012 allowed some suppliers to purchase large inventories, easing the expression of the price spike in 2013 in market prices. As productivity per worker continues to improve in conjunction with decreasing market concentration, IBISWorld projects the price of heat treatment services will continue to decline slightly in the three years to 2017, benefiting buyers with falling prices.
Still, other aspects of the heat treatment services market are detrimental to buyer negotiation power. Low availability of substitutes forces buyers to seek heat treatment services for their material treatment needs, which empowers suppliers with greater price control. “Extreme volatility in the price of natural gas, high volatility from private investment in metalworking machinery and moderate volatility in car sales have contributed to high price volatility in the past three years. Volatile prices limit the ability of buyers to accurately budget heat treatment services and decrease buyer power,” Young says. Suppliers also display moderate average bankruptcy risk because the majority of vendors are small enterprises with singular revenue streams. For more information, visit IBISWorld’s heat treatment services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of heat treatment services. Heat treatment services include annealing, normalizing, aging, carburizing heat treat and vacuum anneal heat treat services, among others. Heat treatment processes typically have metallurgical applications, which are used in the manufacture of materials such as glass. Heat treatment involves the use of heating and chilling to achieve a desired result.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.