The global aluminum die casting market size was valued at USD 65.34 billion in 2021 and is projected to reach USD 102.24 billion by 2030 at a CAGR of 5.1% from 2022 to 2030.
Die casting is a process of metal casting that involves squeezing molten metal into a mold cavity under pressure. Two hardened tool steel dies machined into shape create the mold cavity, which works as an injection mold during the procedure. Non-ferrous metals, such as lead, copper, pewter, zinc, aluminum, magnesium, and tin-based alloys, are used in most die castings. A cold-chamber or hot-chamber machine is employed depending on the metal being cast.
As the casting machinery and metal dies are expensive, the procedure is usually limited to high-volume production. Die casting parts is a reasonably straightforward process with only four primary phases, resulting in a low incremental cost per item. Die casting generates more castings than any other casting technique because it is well suited for vast quantities of tiny to medium-sized castings. Die castings have an excellent surface polish and dimensional consistency.
Automobile manufacturers are under pressure from regulators to enhance vehicle efficiency and reduce the environmental impact of greenhouse gas emissions. Aluminum is considered a sustainable resource since it helps to reduce carbon dioxide (CO2). It prevents roughly 70 million tonnes of CO2 from being released into the atmosphere. Using 100 kg of aluminum in vehicles can save 46 liters of fuel per year.
Engine blocks, suspension arms, frames, pistons, heat shields, trim, and heat exchangers are only some aluminum die casting applications in the automotive market. Aluminum's diverse applications contribute to a significant reduction in vehicle weight. As a result, the automotive application's share of the aluminum die casting market is expected to rise rapidly over the forecast period.
With the new Euro 6c emissions regulations, Europe has grabbed the lead. Most industry professionals believe that reducing weight is the most basic approach to improving fuel efficiency, and aluminum is an essential element of that process. In such a scenario, it is almost guaranteed that aluminum demand in the automobile sector will skyrocket during the forecast period.
Technological advancements in the sector drive the need for automotive components. China is the world's largest automotive market in terms of demand and supply. Japan, India, and South Korea are among the top ten largest automotive markets globally, resulting in high demand for aluminum in the Asia-Pacific. Over the forecast period, the rising demand for automobiles in the United States is expected to drive the aluminum die casting market growth.
Rising disposable incomes and growing environmental concerns have driven the aluminum market to die casting in the construction sector, particularly in developing economies. In the last few years, the adoption of this casting technology to produce products, including windows, cladding, curtain coverings, and fittings, has grown in prominence. The rapid rise of aluminum die casting is primarily due to the construction sector's growth.
The rise of the construction industry in emerging economies like India, Indonesia, and others is primarily due to the government's ongoing support packages. The Indonesian central bank eliminated a 15% minimum mortgage down payment program and loosened loan disbursement rules to promote first-time homebuyers. Due to these government incentives, the Asia-Pacific region's construction sector is expected to increase steadily, fueling demand for aluminum die cast products over the forecast period.
Construction activities were considered an essential service in many parts of the United States. As a result, the United States' overall construction spending in 2020 grew, which was a very encouraging development in the pandemic. This accelerated aluminum demand to some extent. As building owners increasingly opt to deconstruct rather than demolish old or out-of-use structures, the capacity to recycle aluminum products is becoming increasingly important. When recyclable elements are extracted from buildings, construction activities have a lower environmental impact.
As a result, demand for aluminum die casting industry is expected to rise over the forecast period as the construction industry grows.
Heavy industries, which produce modest to large and heavy products, massive machine tools, and other heavy equipment components, include the aluminum die casting market. The sector also requires a lot of room. Heavy industries are recognized to be capital-intensive for these reasons. Moreover, professional personnel must deliver it, raising the overall cost of aluminum die casting products.
Continuous technological developments in the production of high-quality products necessitate a significant investment in research and development (R&D). Another constraint for the aluminum die casting market is the need for experienced personnel to operate modern machines, particularly in developing and undeveloped economies.
Aluminum production is energy-intensive, resulting in significant CO2 and other greenhouse gas emissions. Aluminum casting produces both solid and liquid waste products and atmospheric pollutants. Other hazardous compounds produced during the production process include hexafluoroethane (C2F6) and tetrafluoromethane (CF4). Also, aluminum fluoride is utilized to eliminate contaminants during scraping, resulting in the emission of fluoride compounds.
Aside from high prices, unfavorable regulations are another factor influencing the industrial sector, and thus the aluminum dies casting market, particularly in developed nations like North America and Europe. The global aluminum die casting market growth may be hampered by strict rules and standards set forth by the United States EPA and the European Environment Agency regulating waste emissions into the environment over the forecast period.
Aluminum high-pressure die casting parts have been increasingly popular in various industrial applications. The technique produces lightweight components with a lot of flexibility for complex designs. Due to rising aluminum production and demand in the region, significant developments are expected in the European Union and Asia-Pacific region.
For example, in 2020, China manufactured the most refined aluminum in the Asia-Pacific zone, with around 37.08 million tonnes produced. In 2020, Indonesia produced roughly 220 thousand tonnes of refined aluminum, comparable to China. In the same year, the aluminum output in the United States was 7.50 million tonnes, with more than 3.80 million metric tonnes produced in Europe. Moreover, prominent competitors increase their acquisitions and collaborations to accelerate market growth.
The global aluminum die casting market share has been classified based on the process, application, and region.
Based on the process, the aluminum die casting market has been segmented into pressure die casting and others. The pressure die casting process segment is expected to dominate the global market, and it is projected to reach USD 9,446 million by 2030, registering a CAGR of 4% during the forecast period.
Enhanced quality, long service life, high reliability due to homogeneity of mass-produced components, speedy manufacturing, low die casting tooling maintenance, versatile design, and minimal assembly are all advantages of pressure die casting. Thus, its high adoption in the sector due to the benefits is likely to drive the market over the forecast period.
The aluminum die casting market has been segmented into transportation, industrial, building & construction, telecommunication, consumer durables, energy, and others. The transportation application segment is expected to dominate the global market, and it is projected to reach USD 7,924 million by 2030, registering a CAGR of 4% during the forecast period.
As aluminum die castings are lightweight and have good corrosion resistance, mechanical characteristics, and dimensional stability, their use in vehicles that need to be light and robust is expanding. The adoption of lightweight vehicles is expected to fuel the rise of aluminum components such as steering knuckles, crash management systems, closures, and structural die cast parts in the transportation industry in the future years. Thus, the market of aluminum die casting is expected to be driven by the consistent demand for aluminum parts from lightweight automobiles over the forecast period.
The COVID-19 pandemic posed a constant threat to the aluminum die casting market. The pandemic significantly impacted the aluminum industry, with positive and negative effects in 2020. Also, constraints were evident in the first quarter (Q1) of 2021 with the second and third waves of the virus. The aluminum dies casting market demand-supply chain was interrupted by mandatory shutdowns in manufacturing activities during the lockdown period, followed by stringent standards requiring enterprises to function at minimum capacity.
Fluctuation in raw material prices, unemployment, low production, and transit disruptions hindered aluminum die casting manufacturing. Primary aluminum prices, for example, peaked at USD 1,810 per tonne on January 21, 2020, before falling to 1,421.5 on April 8, 2020. From May 2020 forward, the prices began to rise. The aluminum (Cash settlement) price was USD 2,446 per tonne as of May 5, 2021.
The post-pandemic phase will be necessary for the global aluminum die casting market. The recovery could be hampered by supply chain disruptions, which will affect market dynamics and product prices. Additionally, the global market will test unfavorable financial conditions and increased spending due to distribution and transmission capacity restrictions. Also, limited production, support operations, labor shortages, and constraints for other end-user sectors, suppliers, and vendors may fail to meet the consumer demand. Overall, the recovery will be challenging for the global market.
The global aluminum die casting market share has been segregated into North America, Europe, Asia-Pacific, Central and South America, and the Middle East and Africa.
With a market value of USD 19,274 million by 2030, registering a CAGR of 6%, Asia-Pacific is expected to be the largest aluminum die casting market. The regional market growth can be ascribed to growing economies like China, India, and South Korea, seeing increased spending in the manufacturing and end-use industries. The developing manufacturing sector and increased investments are expected to drive market growth for aluminum die casting across various sectors.
As Asia-Pacific dominates global renewable energy installations, the energy industry has a significant presence in the Asia-Pacific aluminum die casting market. However, the pandemic will have a short-term impact on the sector, such as a drop in global energy consumption. In the long run, the region's rise in the energy industry is likely to benefit aluminum die casting demand over the forecast period.
With an expected market value of USD 8,759 million by 2030, registering a CAGR of 4%, Europe is expected to be the second-largest market for aluminum die casting. The European Union's focus on lowering CO2 emissions by implementing Euro 6d emission regulations in 2020 has created a considerable growth potential for lightweight materials. Fuel efficiency and CO2 emissions are directly related to weight.
In Europe, manufacturers must pay an extra emission premium for their fleet's excess CO2 emissions. The penalty payments are intended to reduce rising CO2 emissions. In Europe's automobile industry, a focus on lightweight materials is expected to drive market growth for aluminum in the years ahead. Over the forecast period, a robust automotive sector in countries like Germany, Italy, and France is likely to contribute to significant demand for aluminum die castings.
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