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Foundry Daily News

27. July 2008

Are China's diecasters well-prepared for growing opportunities?

As die casting requires little cutting during machining, it is being regarded as an optimal way for cleaner production. It also enjoys more opportunities in the automotive sector as lightweight cars are increasingly seen as products that enable energy saving.

Last year, China's die casting production increased 16.1% from the previous year, amounting to 1.19 billion tons, including 963 million tons of aluminum alloy, 201 million tons of zinc alloy, 18 million tons of magnesium alloy, and 62 million tons of copper alloy. The figures involved high-pressure die casting.

Although market development brought about business opportunities for China's die casting industry, the continually rising cost has been a challenge to many of the manufacturers in the sector. Against this background, the 6th China International Die Casting Congress was held on June 20 in Shanghai.

Song Caifei, a senior engineer of the Diecasting Technical Committee of China's National Foundry Association, gave a speech during the congress, summing up the various opportunities that the Chinese die casting industry could grasp.

Firstly, die casting for aluminum automotive engine block grows rapidly. China's major engine enterprises have already introduced heavy die casting machine automatic production line, and been able to produce big aluminum alloy die casting.

Secondly, the Chinese auto parts and components industry is targeting an industry value of RMB1.3 billion by 2010, compared with the RMB67 million in 2007. Export value by 2010 is expected to account for 10% of global auto parts and components industry value. This is obviously a big market for China's die and casting industry.

At the same time, China's motorcycle industry has greatly contributed to the die casting industry development. The real estate industry also helps boost the metal casting industry.

However, the costs of energy and raw materials are rising, while prices of die casting are falling. Coupled with other factors like rising labor cost and investment for eco-friendly production, the profit margin of China's die casting enterprises is shrinking by the day.

To survive, the enterprises must change their business strategy, Song Caifei suggested.

Investments should be tightened and allocated across different segments. Small to medium sized casting production could be considered.

Innovations of new technology, materials and manufacturing techniques, etc. are important sources of profits, while building a well-known brand is a necessary step, he said.

While the US automotive industry is under the shadow of a slowed economy in the country, the Chinese automotive industry was largely unaffected, as it basically caters for domestic demand.

Su Shifang, senior engineer of China's National Foundry Institute, pointed out that on one hand, China is in the process of urbanization, industrialization and modernization. Through adding value to products, die casting enterprises can increase their competitiveness in the high-end market.

On the other hand, under the global trend of energy saving, lightweight frames, such as those made of aluminum and magnesium alloy, have been used for car-body, replacing steel for vehicle casting.

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