Steel Founders’ Society of America

2019 Industry Market Forecast

Marketing Committee Roleas defined by SFSA Board

The function of the Marketing Committee is to broaden the market for and promote the use of steel castings by investigating and developing new markets, developing and implementing an effective marketing program, and communicating the advantages of steel castings to present and prospective consumers in an effective manner.

To carry out its mission, the committee maintains liaison with other committees of the Society through the staff, identifies technical, business and market topics of interest to customers and SFSA members, directs development of the material and delivery of the information. The committee develops the deliverables for the marketing program such as messaging, competitive input, target market, and specific planning, The committee also performs related market research to help guide the work of the Society and prepares each year for the Society an annual forecast of steel casting demand…..

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Customer Education Resources

• www.sfsa.org/education.php• Member Directory• Free SFSA Publications• Customer Webinars• White Papers• Foundry Glossary• Other buyers/designer resources

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Plans to Expand and Enhance Customer Education Resources

Led by Marketing Education Subcommittee: • Steve Cooke – Badger Alloys• Jessica Okhuysen – Corporacion POK• Rob Kriger – Eagle Alloys

Objectives: Organize, Update, and Expand Content

Near-term Goals (6 months):• Reorganize content on website to improve accessibility• Identify and prioritize opportunities to update and expand content• Provide education resources for members on Steel Wiki • Additional white papers and customer webinars

Long-term Goals (1 year)• Update and expand casting purchasing, design, and manufacturing

content on SFSA website • Benchmark other trade associations• Implement outreach campaign to customer markets

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Forecast Process

• Segmented primary markets• Identified key customers and users in each

market• Analyze customer top line sales• Marketing committee input• Leverage Customer Associations• Review analyst reports

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Total Castings Market

2018 Growth 13% or 12% excluding Rail2019 Growth 9% or 8% excluding Rail

0

200000

400000

600000

800000

1000000

1200000

1400000

20022003

20042005

20062007

20082009

20102011

20122013

20142015

20162017

20182019

All Markets

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• Recovery from trough

• Impeding growth:– Labor shortage

– Slow down in economy mid to late 2019 (late in economic cycle)

– Oil price????

Railroad Forecast

• Recovery from trough– Car deliveries 2018 - 53,0002019 - 60,000

• Oil price recovery• Strong consumer

product demand• Modest coal revival

2018 - 15% / 2019 - 11%

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

0

100000

200000

300000

400000

500000

600000

20022003

20042005

20062007

20082009

20102011

20122013

20142015

20162017

20182019

Rail

Railroad RR cars3 per. Mov. Avg. (Railroad) 3 per. Mov. Avg. (RR cars)

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Railroad 2017 2018 2019 2020

Railroads(sales)

6.6% 8.1% 5.9% 4.8%

Equipment(sales)

-20.2% -1% 9.8% 10.6%

SFSA Forecast

(tonnage)

-15% 15% 11%

% change from prior year

Customer Market Sales Forecast

Note: Customer market data is percentage change in sales, SFSA forecast is percentage change in tonnage.

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Mining Forecast

• 232 Tariffs impacting mineral prices –Increase domestic mining

• US currency driving imports

• Replenishment of equipment inventory –Price buy vs. Value

• Trade war adversely impacts mineral prices and demand2018 - 12% / 2019 - 7%

9

0

50000

100000

150000

200000

250000

300000

350000

200220032004200520062007200820092010201120122013201420152016201720182019

Mining

Equipment Consumables Mining

Mining 2017 2018 2019 2020

Mines(sales)

20.6% 6.7% -2.2% 1%

Equipment(sales)

8.1% 11.5% 5.1% 3.9%

SFSA Consumables(tonnage)

0% 10% 7%

SFSA Equipment(tonnage)

-3% 15% 7%

% change from prior year

Customer Market Sales Forecast

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Construction Forecast

• 5-10% projected growth in transportation, residential, and commercial construction

• Anticipated increase in infrastructure spending

• Replacement sales slowed by large used equipment inventories2018 - 15% / 2019 - 6%

0

20000

40000

60000

80000

100000

120000

140000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Construction

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Construction 2017 2018 2019 2020

Equipment(sales)

10.8% 14.9% 5.9% 4.1%

SFSA Forecast(tonnage)

-2% 15% 6%

% change from prior year

Customer Market Sales Forecast

12

Truck Forecast

• Surge in freight growth anticipated through early 2020– 9.5% demand

increase• Fleets purchasing new

trucks to increase needed freight capacity– Regulation on hours

2018 - 14% / 2019 - 10% 13

0

10000

20000

30000

40000

50000

60000

200220032004200520062007200820092010201120122013201420152016201720182019

Trucks Class 8

Trucks 2017 2018 2019 2020

Manufacturers(sales)

8.8% 14.6% 3.5% -2.6%

SFSA Forecast(tonnage)

-5% 14% 10%

% change from prior year

Customer Market Sales Forecast

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Pump and Valve Forecast

• Slight growth volume –inflationary impact

• Strengthening markets• Anticipated trend of new

projects being released– Petrochemical

2018 - 5% / 2019 - 4%

0

10000

20000

30000

40000

50000

60000

70000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Pumps & Valves

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Pumps and Valves

2017 2018 2019 2020

Manufacturers(sales)

2% 8.9% 6.2% 5.5%

SFSA Forecast(tonnage)

0% 5% 4%

% change from prior year

Customer Market Sales Forecast

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Oil Field Forecast

• Oil prices projected to stable in 2019

• Customers replacing depleted inventories

• Slight growth projected US rig count

2018 - 19% / 2019 - 10%

0

10000

20000

30000

40000

50000

60000

70000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Oil Field

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Oil Field 2017 2018 2019 2020

Manufacturers(sales)

2.5% 8.5% 7.4% 10.6%

SFSA Forecast(tonnage)

0% 19% 10%

% change from prior year

Customer Market Sales Forecast

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Military Forecast

• Large defense bill approved with significant budget increase for ground systems and shipbuildingBillions 2018 2019Ground $ 3.2 $ 5.8 Ship Building $ 16.4 $ 18.4

2018 - 13% / 2019 - 8%

0

5000

10000

15000

20000

25000

200220032004200520062007200820092010201120122013201420152016201720182019

Military

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Military 2017 2018 2019 2020

Ground Systems(sales)

3.2% 12.8% 4.1% 5%

Naval Systems(sales)

2% 12.1% 6.1% 4.8%

SFSA Forecast(tonnage)

2% 13% 8%

% change from prior year

Customer Market Sales Forecast

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Other Market Forecast

2018 - 7% / 2019 - 10%

0

20000

40000

60000

80000

100000

120000

140000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Other Markets

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• High quotation levels• Strong orders

Forecast Summary2018 - 13% / 2019 - 9% 2018 - 12% / 2019 - 8%

0

200000

400000

600000

800000

1000000

1200000

1400000

20022003

20042005

20062007

20082009

20102011

20122013

20142015

20162017

20182019

All Markets

0

100000

200000

300000

400000

500000

600000

700000

800000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

All Markets Excluding Rail

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