Where Powder Metal Companies & Their Industry Stand in 2019 & Beyond.

Posted by Horizon Technology - January 10, 2019

It feels like every discussion about manufacturing these days includes two “T” words: “Trump” and “tariffs.” Powder metallurgy is no different -- but there’s much more going on than even those in the industry realize.

Tariffs may be the lead story in powder metal news, but it’s far from the only one. And thankfully, much of the news is exciting as the industry gears up for 2019 and beyond. But that’s only if powder metal companies are willing to evolve.

Powder Metal Companies in 2019 -- and Beyond

Let’s take a little trip down memory lane. Are you old enough to remember the original Xerox machines?

They were huge, copied only in black and white, and were slow and prone to frequent jamming. Advances in technology lead to color printing, high-speed copying and nearly trouble-free printing. However, a technology shift toward personal computers, personal printers, and electronic data storage lead to decline in the sales and use of these large printing centers.  

How does this parallel the present powder metal industry?

The automotive industry has been the lifeblood of powder metallurgy for many years. (Currently, about 80% of all powder metal parts made are for the auto industry). However, the auto industry is going through a metamorphosis that entails greater performance utilizing smaller engines, which inherently use less powder metal.

It wasn’t that long ago that V8 was the engine of choice for almost all vehicles. Now, V6s and even four-cylinder engines are being utilized in more and more demanding applications. Couple the trend of smaller engines with “electrification” of the automobile, and there’s potential for a long-term negative impact on the powder metal industry.

How can the industry continue to enjoy the long-term growth that it has been blessed with for many years? Yes, technology innovations in the area of compaction, sintering, and material development will be necessary. But it’s very important for powder metallurgy leaders to keep their heads on a proverbial swivel -- to stay abreast of the current business but have one eye focused toward future trends (both long-term and short-term).  

Although much of the above deal with the auto industry, it’s true that other industries have and will continue to capitalize on the advances realized in the auto business:

  • Lawn & garden

  • Hand tools

  • Recreational industries

These important business segments will have their own unique requirements that can be satisfied with the advances noted above.

What are some of the advances that powder metallurgy leaders should aggressively pursue?

  1. Unique materials that offer higher mechanical performance, better wear resistance, etc. to compete more effectively during the next wave of downsizing of the automobile.

  2. Development of new and improved magnetic materials that can participate/facilitate in the electrification of the auto.

  3. Higher part densities combined with higher temperature sintering (greater than 2300 °F) to achieve performance that practically mirrors wrought steel.  

  4. Development of new bonding and joining technologies to enhance the shape-making and performance attributes of powder metal.


Focusing on More Than Numbers

The growth of the industry is just fine. You can read about those numbers in another article.

But based on the powder metal parts that win competitions every year, there’s still a lot of SOS -- same, old stuff -- being made.

The main focus of this industry is evolving as we speak. Yet based on those award-winning parts, ingenuity in industry circles is spinning in place. Ingenuity is idling rather than being in any kind of gear.

That’s where many other powder metal companies are going, but it’s not where the state-of-the-art ones at heading. While many are still rolling out ’80s and ’90s technologies, we’re wondering what we’re doing to do for 2020 and beyond.

Things today aren’t what we expected they’d be 10 years ago:

  • Additive manufacturing is taking leaps forward. The cost of raw material is $20-$50 a pound. You can have a part machined for a whole loss less than what the vendor’s going to charge you.

  • Metal injection molding was supposed to take over powder metallurgy, but it’s still just a small part of the industry. Yes, there was 130% growth last year in MIM, but it’s still a tiny piece of the pie

So the industry did a great job yesterday, but what is it doing for customers today? We hope to see the evolution of materials and technologies go beyond just caps and conducting rods. What can you do and design differently? The technology is out there and waiting.

Materials & Machinery

There have been advanced in presses, but have they really been working? What doors are open to you if you can get the temperature to 2,300 degrees? Some people are doing that, but they’re doing it with stainless steels. How can we shift that back toward iron materials?

Through innovative uses in presintering and alloying, we can offer unique systems that create a wider variety of materials, customized to whatever your component needs. So what we’re looking for is greater use of compaction technology in coming years.

2030: Electrification of the Motor Vehicle

For the United States, most people don’t believe total cost of ownership issues will be the driving factor in the “electrification” of the motor vehicle until 2030.

There’s not quite enough anti-CO2 emissions momentum in the United States to drive a change to full electrification of the motor vehicle. Still, it seems more consumers are seeking alternatives to that gas-guzzling SUV. They’re looking for a more eco-friendly solution, which plays right into the strength of powder metal.

The idea of the family car may be on its way out. Automated, on-call vehicles and ride sharing are in. All these things could have significant impact on the auto industry as well as emissions reductions.

Just look at Asia and Europe -- they’ve already gone past that tipping point in many nations. They’re focused on reduction on pollutants like carbon dioxide, plus their inherent gas pricing is so much higher than in the U.S. In other words, there’s more motivation overseas to make those switches today rather than 2020. -- at least for scooters and e-bikes, if not also for motor vehicles.

In the U.S., this consumer shift seems to be pushed out much further.

Are the Tariffs a Barrier?

In 2019, there are a lot of varied opinions on the future of metal manufacturing. Will there be another recession? Will growth continue? Some feel tariffs may make a big impact on that. Others don’t.

Officials in some powder metal companies are concerned how U.S. President Donald Trump’s tariffs on Chinese imported goods will impact business. Some say it’s hard to compete with European, Middle Eastern, and Asian companies who are able to provide aluminum powder to American companies without paying tariffs.

Some experts also believe tariffs create risks to current jobs and to creating new jobs.

Still, the Metal Powder Industries Federation (MPIF), in its “State of the PM Industry in North America-2018,” seems more upbeat. The expectation is for modest growth and technological innovations leading to sustained expansion.

Wrap-Up

Growth or no growth, one of the biggest stories in the powder metal industry should be a renewed emphasis on technology.

New attention to collaboration with the National Science Foundation and grants for college students, many of whom stay connected to metallurgy and powder metal companies, mean research, development, and innovation down the road. And innovation is key to future success.

As for the general question of “What’s next?” ... nobody can be sure. There are some concerns about stagnation. We’ve still not felt the full effects of the tariffs. But the most cutting-edge PM parts developers appear to be quite positive about 2018 and beyond -- and so should you!

To learn more about the material processes driving innovation and growth in PM, get the free handbook below:

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