The powder metallurgy market is expected to grow at a CAGR of 6.07% over the forecast period to reach a total market size of US$9.753 billion by 2025, increasing from US$6.847 billion in 2019. Powder metallurgy is a process for forming accurate metal components from metal powder through compacting. Increasing middle-class income coupled with rapid urbanization is increasing demand for automobile and consumer electronics products which is driving the growth of the market during the forecast period. In addition, growing advancement in technology and rising investment in research and development is propelling the growth opportunities for vendors and manufacturers. However, fluctuation in the prices of raw material, the high capital requirement is expected to restrain the growth of the market in the coming years.
Expanding the automotive industry is driving the market during the forecast period
The automotive industry is utilizing powder metallurgy of multiple reasons, due to changing industrial landscape, the market now days are demanding more than just a durable component and components are now competing to meet the lightweight requirement. The flexibility in the development of mechanical parts with diverse composition enables the automotive producers to provide high accuracy and low material wastage. Also, the nascent industry of autonomous driving vehicles (ADV) is getting popularity and opens new areas of opportunity for high-quality automotive components especially in developing countries like China which has considered it a priority sector for development. According to the Government of China, Chinese vehicle production has increased from 23,492 thousand in 2014 to 27,809 thousand in 2018. The revival of the automotive industry in many parts of the world is anticipated to boost the demand for powder metallurgy in the coming years. In addition, power metallurgy is considered as a cost-effective melt-forming solution and enables part-to-part consistency with excellent surface finish such benefit is attracting automotive manufactures to use this type of technique.
Electronically and electronics segment is showing a significant increase
Rapid urbanization coupled with growing disposable income expands the purchasing power of the consumers which further increases the demand for consumer electronics products thus augmenting the market growth opportunities for power metallurgy vendors and manufacturers during the forecast period. Also, expanding the manufacturing sector and rising government initiative to promote the growth of the manufacturing sector is anticipated to witness the progressive growth opportunities for the powder metallurgy market during the forecast period. For instance, in the United States Trump administration has announced policies favorable for the manufacturing sector, which has resulted in the year-on-year growth of total industrial production. In fact, according to the World Bank, the total value added by the manufacturing industry has increased from US$1.695 trillion in 2009 to US$2.173 trillion in 2017.
The Asia Pacific is estimated to hold a significant share in the market.
By geography, the global powder metallurgy market has been segmented as North America, South America, Europe, the Middle East and Africa, and Asia Pacific regions. The Asia Pacific accounts for the significant share of the powder metallurgy market in 2019 and is projected to remain at its position throughout the forecast period. This growth is attributed to the strong presence of key players in the region and established the automotive industry. The region is showing exponential growth opportunities owing to expanding the manufacturing industry in the region and favorable government policies for the development of the manufacturing sector. Besides, due to rising household expenditure, there is an increasing demand for consumer electronics which attracts market players to invest in the country in order to cater to the growing consumer base which is further expected to propel the market growth opportunities for manufacturers and vendors in the coming years. For instance, according to the Organisation for Economic Co-operation and Development, household spending in China has increased from USD 2,260,487 million in 2005 to USD 9,809,086 million in 2018. Also, in Europe, due to the expanding aerospace industry and the presence of major commercial aircraft the market is growing at a substantial rate. Similar trends have been noticed in the North American region, which is witnessing significant growth on account of expanding the manufacturing industry coupled with increasing investment by market players.
Prominent key market players in the global powder metallurgy market are adopting various growth strategies such as new product launches, M&A, and partnerships to expand their global footprint. For instance, recently Equispheres, a materials science innovator from Canada received $8 million funding from SDTC to facilitate scaling its metal powder production capacity in the next two years. Also, in 2019, GKN Powder Metallurgy a leading metal powder and parts manufacturers acquired specialist polymer 3D printing service provider Forecast 3D. The acquisition presents a significant expansion of GKN powder metallurgy’s additive capabilities.