Iron and Steel Forgings

SIC 3462

Companies in this industry

Industry report:

This industry includes establishments primarily engaged in manufacturing iron and steel forgings, with or without the use of dies. These establishments generally operate on a job or order basis, manufacturing forgings for sale to others or for interplant transfer. Establishments that produce metal forgings for incorporation in end products produced in the same establishment are classified on the basis of the end product. Establishments further processing forgings are classified according to the particular product or process.

Industry Snapshot

The forging processes of the iron and steel forging industry, not the industry's end products, characterize the industry. Forging reconfigures a substance by pressing, hammering, or constricting it with a great deal of pressure. Most substances are forged after they have been heated, but not melted. Liquefying metals to make parts is called casting.

There are three main processes for forging metal: closed die or impression die forging, which compresses a metal between two dies that contain an impression of the end product; open die forging, which hammers metal between two flat dies but moves the piece between blows to shape the end product; and seamless rolled ring forging, which punches a hole in the work piece and then rolls and squeezes it into a thin, seamless ring.

All forging processes make very resilient parts known as forgings. Forgings are strong because forging processes create a grain flow in the parts of the finished product that require maximum strength. Forging processes also impart beneficial metallurgical properties, such as ductility, resistance properties, dimensional stability, and absence of porosity. Although companies may forge many types of metal, the most commonly forged metals are carbon steel and alloy steel.

The industry's primary consumers tended to be companies engaged in industries that were concentrated in the same general regions as the forging companies themselves, even though forging companies market their products nationally and internationally. The largest purchasers of forged products are the aerospace, national defense, and automotive industries, as well as agricultural, construction, mining, material handling, and general industrial equipment manufacturers.

In 2009, an estimated 1,031 establishments engaged in manufacturing iron and steel forgings, with or without the use of dies. Combined 2009 revenues totaled $9.58 billion, down from $11.9 billion in 2008, and employment numbered 33,890 workers. There were 374 iron and steel forging facilities, 36.3 percent of the industry total in market share, employing 15,331 workers and with revenues of an estimated $2.73 billion. Another significant industry sector based on shipment values was automotive and internal combustion engine forgings, which contributed about $5.4 billion of the industry total. Together, California, Texas, Illinois, Ohio, Michigan, and Pennsylvania were responsible for over 46 percent of the industry total by number of firms. Michigan led the nation by number of employees and revenues generated, followed by Ohio.

Background and Development

Humans first forged metals by hammering them by hand. The steam hammer automated the forging industry in 1843 when the steam raised the hammer, but the weight of the hammer was the only pressure used to shape the metal. By 1888, a double-acting hammer used steam to supplement the pressure exerted by the falling hammer. Technology continued to advance the industry.

A census taken by Forging reported that two forging methods dominated the industry in 1992: closed die and open die methods. The closed die method was used by 248 companies, while the open die method was used by 109 companies, representing a margin of more than two to one. The ring rolling method was used as a primary method by 16 plants; 13 plants in the census cited other unnamed primary methods of forging. The Forging census included 32 Canadian companies and companies classified in SIC 3463: Nonferrous Forgings.
Forging developed as more of an art than a science, and even in the 1990s, when most forging was almost completely mechanized, forging processes could not be completely predicted with scientific methods. The unique problems posed by forging are the result of the many factors manufacturers must take into account. The most common factors to consider are the properties of the metal to be transformed, the strain or amount of pressure required to shape the metal, the rate at which the pressure can be applied to the metal for deformation, and the appropriate temperature for the deformation to occur without scaling or breaking the material. All the factors must be balanced to achieve consistently desired results from any of the forging processes.

Even with advances in technology, the complexity of some forging problems have not been solved. Determining the kind of die lubricant to use for forging operations is an example. Before the industrial revolution, animal oils, coal, soapstone, and crude oils were used because the products were "simple" and the processes requiring lubricants were "minimal," according to Forging. The advent of the steam hammer demanded new lubricants, which were developed by the end of the nineteenth century. The new lubricants were steam-refined mineral oils, sawdust, salt water, fatty soap solutions, and oil and graphite flake combinations.

The oil and graphite mixtures proved to be effective as forging speeds increased with automation, but because those mixtures were explosive, other lubricants needed to be developed. Mixtures of water and graphite replaced the oil-based mixtures by 1970. In response to health-related problems caused by graphite lubricants, research on synthetic lubricants began in the 1970s. In 1993, Forging reported that "water-based graphites make up about 60 percent of the forging industry sales, synthetics 15 percent, and oil-based graphites 15 percent."

The success of the forging process relies on the effectiveness of the lubricant, but no simple method for selecting a lubricant exists. Each lubricant has advantages as well as disadvantages. Oil and graphite applies easily and works well at many temperatures, but it is explosive and expensive. Water and graphite costs less and helps cool dies, but it requires careful application to work. In addition, graphite dust can collect in the work area and cause problems for workers. Synthetic lubricants are cost-effective and less hazardous but must be applied through spraying, may impede metal flow, and are ineffective to use for forging complex shapes.

Forgers faced significant competition from other industries in the late 1990s and early 2000s as end-users looked for lighter, cheaper materials. Powdered metal, cast metal, plastics, and ceramics posed the greatest threat to the iron and steel forge industry. In addition to the challenges presented by rival materials, iron and steel forgers experienced a drop in demand. Although the U.S. economy boomed during the closing years of the decade, forgers were affected by the collapse of Asian economies during those years and the terrorist attacks on the United States on September 11, 2001. The slowing of the aerospace industry had the greatest potential to harm iron and steel forging business. Because air travel decreased in the wake of these crises, major airlines canceled or delayed orders for new planes, causing a corollary drop in demand from iron and steel forgers.

There are three types of forging orders: custom forgings, which are made at the request of a customer; captive forgings, which are made for the company's own internal use; and catalog forgings, which consist of standardized parts that are resold through various sources. Forged products range from precision aircraft parts to everyday hammer heads and wrenches.

In addition to the general decline of the U.S. economy, material costs and increased pressure from manufacturers in China contributed to the industry's downturn. Although total industry shipments dropped in the early 2000s, the industry improved by the end of 2003 and revenues rose to $5.57 billion in 2005. Hot impression die forgings had $3.59 billion in sales; cold impression die forgings had $564 million; seamless rolled ring forgings had $371 million; open die and smith forgings had $739 million; and other iron and steel forgings had $301 million in 2005.

Despite the industry advancement over the mid- to late 2000s, the total number of aircraft idled had increased to levels not seen since the terrorist attacks of September 11, 2001, according to 2008 reports from airline consulting firm Ascend. An unprecedented weakened economy decreased air travel and tighter bank lending practices lessened the demand for new aircraft and parts, putting a strain on the industry as a whole, including the iron and steel forgings operations.

In 2008, Forging magazine reported that 19.23 percent of the forging facilities shipment values of $1 million; 26.92 percent had between $1 million and $5 million; 3.85 percent had between $5 million and $10 million; 19.23 percent had between $10 million and $20 million; 19.23 percent had between$20 million to $49 million; 3.85 percent had between $50 million and $100 million; and 7.69 percent had more than $100 million annually.

One survey conducted by Forging magazine found 76 percent of the forging executives believed shipments would stay at current levels or improve in 2009. Carbon and alloy steels were the metals of choice at 84.6 percent and 53.8 percent, respectively. Stainless steels were forged by 42.3 percent of those queried, aluminum and titanium forged by 15.4 percent, hot alloys by 11.5 percent, and brass and copper alloys were forged by 19.2 percent of the facilities. The respondents shared their concerns going into 2009, and the high cost of health insurance for employees was at the top, followed by the elevated cost of energy. The third concern was the high cost of raw materials, followed by increased foreign competition. The shortage of skilled workers rounded out the top five concerns.

Current Conditions

The U.S. economy fell stagnant in 2009 as both nonresidential and residential construction dropped dramatically to 40- and 50-year low, respectively. Auto sales fell also, and two (Chrysler and General Motors) of the Big Three U.S. auto makers filed for bankruptcy. Although the aerospace industry was buoyed by military sales, commercial aircraft sales fell; orders and backlogs for the total aerospace industry was down by 33 percent during 2009. As a result, apparent consumption of steel in the United States fell by 41.6 percent during 2009 to 57.4 million tons, according to data from WorldSteel as reported by American Metal Markets in April 2010.

According to figures released by the Forging Industry Association, in 2009, custom forging in North America (including plants in the United States, Canada, and Mexico), fell across the board--by impression die, open die, and seamless rings. Specifically, impression die forgings declined from $6,084.8 million in 2008 to 4,832.1 million in 2009; open die from $2,035.0 million to $1,521.6 million; and seamless rings from $1,785.8 million to $1,298.2 million.

While shipments were down 21 percent for impression die forgings in 2009, bookings during the year were down 33 percent. This sector was hurt by depressed U.S. auto sales, which dropped by 21 percent in unit sales during 2009. As a result, the aerospace industry accounted for 39.6 percent of this sector 's revenues in 2009 and automotive sales fell to 19.3 percent, down from 23.6 percent and 30.3 percent in 2008 and 2007, respectively.

Open die forgings production revenues dropped 25 percent in 2009, down from the record-high of over $2 billion in revenues achieved in 2008. (Open die forgings, which generated just over $900 million in 2004, more than doubled in value by 2008.) Bookings during 2009 decreased 34 percent. Construction, mining, and material handling equipment was the top end use for open die forgings, with a 16.3 percent market share, followed by general industrial machinery and equipment (i.e., pumps, bearings, air or gas compressors, drives, gears, etc.), which accounted for 10.6 percent of the sector.

Seamless ring forgings production revenues fell off by 27 percent during 2009 and bookings dropped by 50 percent. Aerospace engines and engine parts were the largest end use, accounting for 55 percent of seamless ring forgings in 2009.

Those companies that weathered the poor economic conditions in 2009 saw some signs of recovery during 2010. By August 2010, aerospace orders were up, as were orders for industrial machinery. However, the outlook remained mixed as economy improved slowly, and the steel market remained volatile. WorldSteel estimated U.S. apparent consumption of steel in 2010 at roughly 72.7 million ton, about 27 percent 2009. WorldSteel forecast that demand would increase to 78.1 million tons in 2011, an improvement but still well below prerecession levels (to about 1991 levels).

Industry Leaders

The majority of the most successful forging companies are privately held. Among the leading establishments in the late 2000s were Ladish Co. Inc. Based in Cudahy, Wisconsin, Ladish derived 90 percent of its sales from the aerospace industry. The company's 2009 revenues were $349.8 million, down from $469.5 million in 2008. Ladish employed about 1,137 workers. Another leader, SIFCO Industries Inc., enjoyed major commercial airlines as its primary clients. Based in Cleveland, Ohio, SIFCO reported 2009 sales of $93.9 million and 310 employees.


Forging requires large amounts of capital investments to maintain the expensive equipment, but the industry sustains companies of a wide variety of sizes. While companies have between 50 and 250 employees, there are thriving businesses with as few as 10 and as many as 1,000. The iron and steel forging and nonferrous forging industries employed 28,944 workers in 2005 compared to 31,846 in 2002, of which 22,105 were directly involved in production. Production workers earned an average hourly wage of $17.95. The greatest number of iron and steel forging companies were in Ohio, Texas, and Pennsylvania. In 2009, the total number of employees increased to 33,890 skilled workers with the majority scattered throughout Ohio, Illinois, Texas, and Pennsylvania. Of the total number of forging facilities, nearly 71 percent employed less than 25 workers; 14.3 percent employed 20 to 99 workers; and 8.6 percent employed 100 or more workers (6.2 percent were unknown). According to the U.S. Bureau of Labor Statistics, the mean hourly wage for forging machine setters, operators, and tender (metal or plastic) in May 2009 was $17.11.

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