Melbourne, Australia (PRWEB) April 15, 2015 -- The Iron and Steel Casting industry is involved in the production of intermediate products, which are consumed by a variety of users. This means that the performance of the industry is heavily influenced by developments within key downstream markets, particularly the Mining, Construction and Manufacturing division. According to IBISWorld industry analyst Tommy Wu, “A cyclical downturn in key downstream industries within the Manufacturing division has taken its toll on the Iron and Steel Casting industry over the past five years.” Furthermore, marked volatility in iron and steel prices have added to the industry's decline. Despite this, activity in the Mining division has supported the industry and restricted the decline in revenue.
Over the five years through 2014-15, the industry is expected to decline at a relatively slower rate, at an annualised 0.8%, to reach $2.2 billion. Machinery manufacturing industries consume large amounts of cast ferrous metals for their production processes and represent a key market segment. These manufacturers include those involved in the manufacture of equipment and machinery used by Australia's resources sector. Relatively healthy demand from this market, fuelled in part by increased mining volumes over the past five years, has helped offset weak demand from other manufacturers. The industry is expected to remain relatively stable over the next five years. “Falling demand from the Manufacturing division and reduced capital expenditure on mining is expected to contribute to declining industry revenue,” says Wu. Lower activity in these areas will reduce the need for steel and iron casting inputs in the machinery manufacturing process, particularly the production of mining equipment and machinery.
The Iron and Steel Casting industry has a low level of market share concentration, with no large players dominating the industry. The majority of industry operators are small firms with fewer than 20 employees, and are geographically spread out. Each operator tends to have machinery catering to a specific segment of the market, such as small or large casts or a certain production method, rather than operating a range of capital equipment with the capacity to meet the needs of all customers. While capital requirements for new entrants are high, machinery and equipment generally has a long useful life. Larger operators usually specialise in a certain market or segment and operate long production runs of similar or identical products. Smaller operators tend to produce customised products in short production runs. There is no mass production in the industry due to the specialisation of most operators into small segments of the market.
For more information, visit IBISWorld’s Iron and Steel Casting industry in Australia report page.
Operators in this industry are mainly engaged in producing iron and steel products through a process called casting, which involves pouring molten ferrous metals into moulds. Industry products are then consumed as intermediate inputs by a range of user industries.
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Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.
Gavin Smith, IBISWorld, http://www.ibisworld.com, +61 396553838, [email protected]
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