Steel must be heated to a specific temperature for it to be forged. Once it becomes hot enough, the metal becomes ductile. That allows it to be malleable, allowing the forger to mold it into virtually any shape of their choice. When properly forged, steel can be permanently shaped without any cracks or defects in the metal because of its malleability.
Steel forgings have greater strength, which makes it less likely to shatter. It offers a greater uniformity in the final product and a greater range of steel that can be used from forging.
Fascinating Steel Forging Industry Statistics
#1. The current value of the steel forging industry in the United States, when combined with metal stamping, is $36 billion. Over the 5-year period ending in 2017, the industry contracted by an average annual rate of 0.5%. (IBIS World)
#2. There are about 2,400 firms currently active in the stamping and forging industry in the U.S. right now. They currently employ about 109,000 people in direct opportunities. (IBIS World)
#3. The global forging market is expected to exhibit healthy levels of growth through 2020, with a forecast CAGR of 8%. (Technavio)
#4. Custom forging is the largest segment in the North American market for the steel forging industry. It currently achieves sales of $6 billion each year. (Technavio)
#5. 61% of the total revenues generated by the steel forging industry today come from the Asia-Pacific region. It also has the largest forecast CAGR through 2020, of around 9%. (Technavio)
#6. When combined with castings and stampings, the total market for metal forging worldwide is estimated to reach more than $630 million by 2022. The steel forging segment of the industry could reach a total of $56 billion if it is able to achieve a CAGR of 5.1% within the forecast period. (Global Industry Analysts, Inc.)
#7. Steel forging is included in the fabricated metal product industry in the United States. As of March 2018, this industry was responsible for the employment of 1.47 million people in seasonally adjusted numbers. About 58,000 employees are responsible for the actual forging process. (Bureau of Labor Statistics)
#8. The average hourly earnings in the fabricated metal industry in the United States is around $24.60. The average full-time worker in the industry works a 41-hour working week. (Bureau of Labor Statistics)
#9. Non-supervisory employees earn about $20 per hour in the steel forging industry, working an average of 42.3 hours per week. (Bureau of Labor Statistics)
#10. As of 2015, the current value of the stainless-steel forging market was $7.51 billion. It was driven by declines in global iron ore prices, which have declined by more than 50% since 2011, with an increase in demand for products with high rates of recyclability. (Grand View Research)
#11. Industrial forging products are the largest market segment within the steel forging industry, accounting for one-third of all revenues. The aerospace and automotive sectors, when combined with the industrial segment, account for more than 75% of total revenues. (Grand View Research)
#12. Cold-forged and hot-forged parts are the primary revenue generators within the steel forging industry. When combined, they contributed an 80% market share in 2015. (Grand View Research)
#13. The North American segment of the steel forging industry is driven by the automotive industry. Revenues within this segment are forecast to reach $1.05 billion by the year 2024. (Grand View Research)
#14. The global share of steel forging is dominated by the Asia-Pacific region, accounting for over 60% of total industry revenues in 2015. China, India, and Japan are the three primary economies which drive the industry forward. (Grand View Research)
#15. In Australia, the steel forging industry is combined with iron forging. For the 5-year period ending in 2018, the industry achieved annual revenues of $523 million. That reflects an annual contraction by the industry of 5.3%. (IBIS World)
#16. The Australian steel forging industry currently has about 130 active firms, providing direct employment opportunities for about 1,300 workers. (IBIS World)
#17. For every $1 that is spent by firms in the steel forging industry on wages, about 20% is spent on capital. Industry equipment is expensive and has an average lifespan of about 15 years. (IBIS World)
#18. For custom forging needs, the oil and gas industry is the largest contributor to the industry. In 2015, more than $5.4 billion in revenues was generated by custom forging for the oil and gas industry. (Allied Market Research)
#19. Shipbuilding needs for the steel forging market have one of the lowest levels of forecast growth compared to all other segments in the industry. It’s growth is an anticipated CAGR of just 3.7%.
Steel Forging Industry Trends and Forecast
There can be significant barriers to entry for newcomers within this industry to achieve profitability. Firms must make a significant capital investment in the forging equipment that is required for steel malleability. Downstream manufacturers typically work with certified suppliers only, which means new entrants must prove skill and consistency before being able to be fully active within the industry.
Even if full certification is achieved, all suppliers must continually demonstrate reliability in quality and service to keep their products at prices that are desirable.
At the same time, especially in the U.S. market, there has been an increased level of penetration from cheaper imports, especially from China. This has further hampered new entries into the steel forging industry and limited profit potentials.
One positive segment within the industry continues to be agricultural equipment and machinery. Manufacturers within this segment provide a somewhat consistent, if not volatile, source of demand.
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