Steel Investment Foundries

SIC 3324

Companies in this industry

Industry report:

This classification covers establishments primarily engaged in manufacturing steel investment foundries.

Industry Snapshot

The steel investment foundry industry revenue totaled $3.18 billion in the United States in 2008. The industry is subdivided into four product classes: high temperature metal investment castings, carbon and alloy steel investment castings, stainless steel investment castings, and non-specific steel investment foundries.

Investment molds are formed by covering a wax shape with refractory slurry. After the refractory slurry hardens, the wax is melted, leaving a mold. Establishments in this industry purchase steel made in other establishments.

According to Dun and Bradstreet, the industry had 273 establishments in 2009. California, Texas, and Michigan had the most firms, with 47, 24, and 23, respectively. By number of employees, the largest states were Utah (3,895), California (2,038), Florida (1,715), New Hampshire (1,583), and Oklahoma (1,357).

Organization and Structure

Steel investment foundries are not necessarily in a class of their own. Many foundries practice investment casting regardless of the metal type, and many steel foundries may practice several casting processes beside investment. For example, the art industry used investment casting to create bronze sculptures, while the jewelry industry used investment casting to produce intricate designs. Relatively few steel foundries, with respect to the entire steel foundry industry, used the investment casting process exclusively.

The Environmental Protection Agency and the Occupational Safety and Health Administration keep watchful eyes on the industry and continually impose regulations. One particular advantage of the investment casting process, compared to other casting processes, is that it is not harmful to the environment. The sand used can be further recycled, and there is no danger of producing hazardous fumes, because the process involves no chemical binders. With less waste and fewer pollutants produced, this process was not severely affected by increasing environmental legislation.

Background and Development

Investment casting is also known as precision casting or the lost wax process. A pattern of wax or other expendable material is created and is attached, sometimes in clusters, to expendable down sprues. This conglomeration is then invested, or surrounded, by a refractory slurry, which then dries and hardens at room temperature. The mold is then heated to melt or burn out the wax or other expendable material. In the hollow cavity, molten metal is cast. This casting process is particularly adapted to the production of small, intricate parts using metals of higher melting points than are feasible for use in die-casting. Steel is one of the primary metals used in the industry.

According to Paul DeGarmo in Materials and Processes in Manufacturing, "investment casting actually is a very old process. It existed in China for centuries, and Cellini employed a form of it in Italy in the sixteenth century. Dentists have utilized the process since 1897, but it was not until World War II that it attained industrial importance for making jet turbine blades from metals that were not readily machinable. Millions of castings are produced by the process each year, its unique characteristics permitting the designer almost unlimited freedom in the complexity and close tolerances he can utilize."

Investment casting is a high precision process and is therefore expensive. The process allows highly complex shapes to be produced while maintaining good dimensional accuracy and surface finishes. The ability to produce thin wall sections is another advantage of using the investment casting process. Sections as thin as 0.015 inches, for example, have been cast.

A major technological advancement in the foundry industry was developed in the early 1990s. This advancement was known as both "rapid prototyping" and "functional prototyping." Rapid prototyping is a computerized system that uses stereolithography and selective laser sintering to create a three-dimensional shape that has been drawn on a computer-aided drafting station. A computer takes the three-dimensional model and mathematically slices it into layers of specific thickness. Each layer is transmitted digitally from the design unit to the production unit, where the material of choice is used to build the shape layer by layer. Using this technology, a designer could take a customer's idea, design it, and in several hours or days have a prototype available for the customer to evaluate. The technology dramatically reduced both the time and expense of producing intricate designs.

Steel investment casting survived the recession of the early 1990s, which eroded the industry's key markets: the aerospace, automotive, and energy industries. The middle of the decade, however, brought another set of challenges. Foremost among these was the continuing decline of the aerospace industry. The end of the Cold War resulted in the Department of Defense slashing its arms expenditures, which fell from $81 billion in 1990 to $45 billion by the late 1990s. Although commercial plane building surged again in the late 1990s, investment casters were affected by the rampant consolidation that swept through the industry. As aerospace companies merged, they turned to fewer and fewer suppliers for their precision cast parts. A similar consolidation occurred in steel investment casting.

Steel investment foundries have also been affected by the increasing use of aluminum cast parts in the automotive industry. According to Ducker Research Company, the average aluminum content per passenger vehicle has risen at an annual rate of 4.3 percent from 1977 to the end of the 20th century, and overall aluminum content in automobiles doubled during the 1990s. Car manufacturers began turning to aluminum because it is easily recyclable as well as being lighter than steel. With federal regulations mandating specific levels of fuel efficiency, automotive companies turn to aluminum cast parts rather than steel to reduce the weight of vehicles.

Another issue for steel investment foundries concerns the quality of the steel required to cast intricate parts. Because extreme precision is needed to produce these castings, any inclusions in the metal will ruin a part. The primary quality issue facing the steel industry in the late 1990s was the cleanliness of steel. Clean steel is essential to the industry because steel that is free of tramp elements, slag, and dross creates better quality parts. By the late 1990s, significant progress had been made in clean steel production.

With the automotive industry continuing to turn toward lighter aluminum cast parts through the 2000s, particularly with fuel consumption a primary concern, steel investment foundries have targeted the sectors of energy, mining, and rail for growth. Continually rising oil prices through the mid- to late 2000s have hurt steel investment foundries in regard to the automotive sector, but they have provided opportunities in the oil/gas and pipeline markets.

A series of hurricanes in the middle of the decade forced oil refineries to have to rebuild to meet capacity of increasing demands. The demand for oilfield equipment spurred growth of approximately three percent in casting shipments to that sector in 2007, with greater growth forecast for the rest of the decade, according to Statecasts Inc. Shipments of steel castings for mining machinery also rose roughly three percent in 2007.

Current Conditions

According to the U.S. Census Bureau, the total value of products shipped for steel investment foundries was $3.18 billion in the United States in 2008, down from $3.45 billion in 2007. Overall the industry saw growth during the latter part of the 2000s, due in large part to expansion in the aerospace and medical fields. However, the industry began to feel the effects of the economic recession during the last quarter of 2008, which continued unabated through 2009. Although recovery was signaled during the first half of 2010, the process was slow. Investment foundries that depended on the auto industry were particularly hurt as Chrysler and General Motors--two of the Big Three U.S. automakers--filed for bankruptcy in May 2009, despite attempts from the federal government to bail them out.

Those investment casting firms that survived tough economic conditions of the late 2000s figured out how to adjust and adapt to a quickly changing marketplace. Some casters were bringing the entire operations under one roof, to offer design, prototypes, and implementation of short- to medium-range runs to customers. Offering skilled, personal customer service on quick turnarounds was the primary way in which small investment casting-focused operations were competing with cheaper imports, primarily from China. Although the auto industry was expected to return slowly, aerospace, defense, and medical equipment sectors were likely to see growth during the 2010s.

During 2010, golf club manufacturer Ping highlighted investment casting when it ran a series of television commercials and online videos focusing on its use of investment casting to make its golf clubs. Ping, which made investment casting popular among golf club makers, reported that the company's founder and inventor of the Ping club, Karsten Solheim, was familiar with investment casting from his previous experience in the aerospace industry.

Industry Leaders

Portland, Oregon-based Precision Castparts Corp. produced investment castings used in the aerospace and power generation industries, as well as other industrial sectors. Aerospace industry casting accounted for just more than half of Precision's sales in the late 2000s. Precision's most notable clients included General Electric and Pratt & Whitney. The company posted revenues of $5.49 billion in 2009 and employed 18,100.

Atchison Casting Corporation (ACC) had been one of the driving forces in the industry's consolidation during the 1990s and early 2000s. After growing to become a 20-facility casting conglomerate by 2003, offering a wide range of casting products worldwide, ACC disbanded and reformed as AmeriCast Technologies Inc. with five facilities, mostly concentrating on steel castings. Headquartered in Atchison, Kansas, AmeriCast Technologies had large customers that included Caterpillar, General Electric, and Electro-Motive Diesel. In 2006, the company was purchased by Castle Harlan and became part of the Bradken Company, operating in 2010 as the Bradken Engineered Products Division.

Another industry leader was Portland, Oregon-based PCC Structurals Inc. with 2009 sales of $253.4 million from all its operations. Citation Corporation of Novi, Michigan, filed Chapter 11 bankruptcy protection in 2004, then restructured from its primary activity as metal castings supplier to become a supplier of machined and assembled components as well as cast and forged components. Citation had 2007 sales of $714.5 million. At the end of 2009, Citation was purchased by Grede Foundries Inc., which became Grede Holdings LLC.

Workforce

According to the U.S. Bureau of Labor Statistics, there were 91,180 workers employed in the iron and steel mills and ferroalloy manufacturing in May 2009. Of these, 42,730 (47 percent) were production workers, who earned an average hourly wage of $21.06. Metal pourers and casters numbered 3,530 and made a mean hourly wage of $20.36. There were 1,440 molding, coremaking, and casting machine setters, operators, and tenders who made an average hourly wage of $19.87.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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