Industry Analysis & Industry Trends
The Ferrous Metal Foundry Products industry, which sells iron and steel castings to manufacturing and construction industries, has struggled with fluctuating demand and increased import competition over the five years to 2015. Foreign competition from low-cost producers in China and India has increasingly challenged domestic operators for market share. Furthermore, volatile input prices have made it difficult for companies to forecast costs. Despite moderate revenue growth, the industry will struggle with significant challenges over the next five years. Excess supply of ferrous metals is expected to keep iron ore and steel prices low. This will benefit margins but prevent revenue from growing dramatically... purchase to read more
Industry Report - Industry Investment Chapter
The Ferrous Metal Foundry Products industry has a moderate level of capital intensity. For every dollar allocated to labour, operators spend an estimated $0.14 on capital. Foundries require a significant amount of machinery and equipment to make moulds, melt and pour metal into moulds, remove excess material from the castings and perform various processes to achieve the desired properties and dimensions. However, foundries also depend on skilled labour to operate machinery and equipment and create high quality castings. To attract talent, operators spend a significant share of revenue on workers' wages. The large-scale mass producers of industry products are more capital intensive, while smaller foundries are more reliant on labour to fulfill their orders.
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