The structural changes of the Hungarian
foundry industry continued also in 2003. However not all the
data arrived from the foundries yet, according to the preliminary
figures the overall casting production in Hungary grew from
136758 tons in 2002 to 156269 tons in 2003.
Despite the unfavourable economic situation
the production and sales of iron castings increased by more
than 26 percent in 2003 to 79596 tons. It is due to the production
increase of a new producer of automotive castings by about
17000 tons. On the other hand, most of the small and medium
size iron foundries decreased their production. The share
of ductile iron castings increased to 38.9% from 19.5% in
2002. Within the use of iron castings the increase of vehicle
industry was the most significant.
The production and sales of steel castings
continued its decreasing trend. It fell by 10% to 4779 tons
(including investment castings). Almost every steel foundry
had to decrease its casting production due to the fall of
home needs, but mainly of export demands.
The increase of the aluminium casting production
continued also in 2003 as it was expected, exceeding 66000
tons. However the dynamism of the earlier 20 percent increase
slowed down to 5.4 percent. Like last year, mainly the foreign-owned,
gravity or pressure die casting companies, equipped with modern
technology could increase their production, delivering to
the automotive industry. On the other hand, many of the small
and medium size aluminium foundries decreased their production.
As some big companies produce ready products from their castings
in a greater extent (i.e. wheel disc, cylinder-head etc.),
the home use of castings also increased. The share of sand
castings further decreased to 0.4%, while the share of pressure
die casting aluminium production continued to increase to
The production of the shaped heavy metal
castings continued its decrease to 4853 tons. While the production
of brass and bronze castings fell, the production of zinc
castings increased slightly in 2003. Our statistics do not
contain the volume and value of the continuously casted products.
Location of the main
consumer areas for foundry products
The manufacture of machinery and equipment
increased by 3.3 percent, however within that the production
of agricultural and forestry machinery declined significantly
by 26.4 percent. The manufacture of motor vehicles, trailers
and semi-trailers grew by 13.5 percent. Exports of transport
equipment also increased. Production was, on the other hand,
down throughout the electrical industry by 26 percent. Ferrous
metallurgy was stagnating, however aluminium production grew
by 14 percent, mostly driven by export sales. Construction
industry - following the boom in 2002 - attained only a minimal
(0.7%) growth, although second half year's figures show a
slight improvement in this sector as well. Significant infrastructure
projects improving economic competitiveness started off in
2004. The act on high-speed road network development - passed
in 2003 - disposes that 431 kilometre high-speed road has
to be built by the end of 2006.
Expectations for 2004
Finally, in the second half of last year
the previous expectations concerning the upturn of the global
economy seemed to materialise: the actual figures also indicate
a clear acceleration in the economic growth of the world economy's
most important actors. Following the first half-year's stagnation
the European Union also experienced growth. Germany overcame
recession, and - although the just starting recovery of the
largest Hungarian export market still appears to be vulnerable
- even a modest expansion in Germany represented a significant
driving force for the Hungarian economy in the second half-year.
Hungary joined the EU on 1st May 2004, which opened a huge
common market for a relatively small country. On the other
hand the prices of raw materials (scrap, coke, pig iron) increased
dramatically, and the energy costs grew significantly, too.
Meanwhile the prices of castings are under strong pressure.
Therefore it is very difficult to make any forecast for Hungary's
foundry industry in 2004. Now it seems that the negative affects
are stronger for the ferrous foundries, and most probably
it will be a very difficult year, especially for the small
and medium enterprises. We regret to say, but some of them
won't be able to survive and have to close down. The aluminium
foundries will probably further increase their production.
The foreign-owned, fairly modern foundries will easier go
through the difficulties, than the Hungarian-owned old ones.
For them it is also easier to benefit from the advantages
of the common European market.
Association of Hungarian Foundries