The benignly positive atmosphere that pervaded the Austria Centre during last month's PM 2004 World Congress and Exhibition in Vienna was reflected in some of the global statistics deployed by the European Powder Metallurgy Association's President, Cèsar Molins, during his plenary glance at prospects for PM. While powder shipments for PM applications had risen, reaching around 880 000 tonnes in 2003, the percentage breakdown by area was interesting.

Dr Molins’ pie chart showed the usual approximate 50 per cent share going to the United States, but the other half of the pie is no longer divided overwhelmingly between Japan and Europe. The "Other" category really has become visible, with its estimated share of the market standing at around 18 per cent, about the same as Europe and rather larger than that of Japan. So who is Other? The obvious answer is China, but while it is true that the booming Chinese economy has been the most visible factor in the recent past, the slightly lower profile of Korea and other Asian players such as Thailand should not be ignored. Nor should the emerging economies of India, Russia and Iran, countries whose profiles are set to take on a dramatically enhanced edge in the short term.

Global Powder Shipments for PM Applications 2003 - Estimated 880k tonnes

PM activities in India date back more than half a century and the industry produces a comprehensive range of powders and products. Forecasts predict production levels of around 10 000 tonnes of manufactured products this year, split roughly 2:1 across transportation equipment and electrical machinery and around 17 per cent up on 2003. Academic activities take place in 15 institutions and research centres across the country.

The Iranian industry is younger, dating back to around 1990, but has a strong academic base at the Univer-sities in Tehran, Mashad and Isfahan. The 2500 tonnes manufactured parts production forecast for this year represents an increase on 2003 of approaching 50 per cent. Car production, a major PM customer in Iran, is accelerating steeply.

Russia produces a very wide range of powder materials and has a long history of involvement in powder metallurgy. Powder production includes more than 7000 tonnes each in the ferrous and non-ferrous categories along with substantial amounts of hard and refractory metals - tungsten (3000 tonnes) and molybdenum powders (1500 tonnes). Around 70 per cent of Russia's copper-base powders are exported to the EU.

In Europe, as in the US, the automotive industry is an important PM customer and while the average weight of PM parts per car continues to increase, the rate of growth is quite slow. That could see quite a dramatic change as the newer semi-automatic gear boxes pioneered so successfully by the likes of Audi gain popularity.
US experience in gearbox and drivetrain economics shows that PM has distinct commercial advantages in some areas. The continuing rise of the diesel and the number of vehicles using variable valve timing are also seen as positive developments for PM.

Market Developments: Average Weight of PM parts per European Car

Market Developments: Forecast sales of Automatic transmission in Europe (Source KGP/JDP)

Dr Molins concluded that although there had been some recovery in Western Europe, it was the economies of the newer EU members in the east that had growth potential. Soaring scrap prices this year had been shadowed by increased electricity and fuel costs. Steel scrap prices have faded from their mid-year peaks as China's economy has slowed, but it is unlikely that they will descend to the $150 a tonne levels of late last year. And just to complicate matters further, some aluminium powder producers have been forced to impose surcharges because of supply difficulties caused by tightening supplies. The Caribbean's "Hurricane Summer" has been blamed for disrupting supplies, especially from Venezuela, but increasing electricity and fuel prices are also major factors.

Principal factors - materials and energy

Materials

• Metal Powder costs are between 10 per cent and 30 per cent of total costs in West European plants; on average, 20 per cent.
• Price increases in the first half of 2004 were around 5 per cent, and up to 10 per cent in the second half; average 7.5 per cent.
• The overall cost impact is therefore 1.5 per cent.

Energy

• Energy costs are between 4 per cent and 7 per cent, including industrial and natural gases. Average applicable energy cost is assumed to be 5 per cent.
• Actual offers show that new electricity contracts will be 20 per cent more expensive than last year. The result is an overall cost impact of 1.0 per cent.
• Total overall cost impacts are roughly 2.5 per cent.
  Source: Fachverband Pulvermetallurgie