Feb_March_AMP_Digital

iTSSe TSS A D V A N C E D M A T E R I A L S & P R O C E S S E S | F E B R U A R Y / M A R C H 2 0 1 8 4 1 iTSSe TSS T ypically, the thermal spray market tends to track with the ebb and flow of the broader global economy. A strong economy with high levels of industrial activity means plenty of applications and demand for thermal spray coatings. In recent years, the global market size for thermal spray has been estimated to be north of $6.5 billion, with the largest sectors for thermal spray providers comprised of aero- space and industrial gas turbine components. These two sec- tors alone represent approximately 60%of the overall thermal spray market. In addition, new coatings and applications in the automotive, medical device, and energy industries have helped to fuel diversification and expansion of the overall mar- ket. Even so, most thermal spray suppliers count on healthy aerospace and power generation industries to drive growth. A disruption in either of these sectors can easily offset strength in the broader market. AEROSPACE MARKET CONTINUES EXPANSION During 2017, a multiyear trend of expansion within the aerospace industry continued as Boeing and Airbus both racked up new orders and added to their expansive backlog. Boeing’s backorders grew to 5864 commercial airplanes by the end of 2017, representing nearly seven years of production. Airbus meanwhile eclipsed Boeing in 2017 for total orders, and entered 2018 with an order backlog of more than 7000 air- planes. With so many planes on order, the market for new jet engines is equally robust. To power these new airplanes, GE, Pratt &Whitney, Rolls-Royce, and Safran have all released new engines in recent years. With new engines come new blades, vanes, stators, rings, and a plethora of other components, which are enhanced through the application of thermal spray coatings. For this reason, captive and independent thermal spray shops—along with their suppliers—are enjoying a very strong market within aerospace and maintaining a favorable outlook for the coming years. GAS TURBINE MARKET SEES CONTRACTION Unlike the aerospace industry, the industrial gas tur- bine market experienced a sharp retraction in recent months. News headlines in early December 2017 detailed global job cuts within General Electric’s power business in excess of 12,000 employees. These cuts are part of an effort to reduce costs by $1 billion in 2018 in response to traditional gas and coal markets softening unexpectedly. GE’s primary compet- itor in this market, Siemens, was reported to be eliminating nearly 7000 jobs as well, also in response to the downturn in power and gas. While the thermal spray coating technology used for industrial gas turbines is typically not as advanced as that deployed in aerospace engines, it nonetheless represents a significant market for all types of wear, abradable, oxida- tion-resistant, and heat-resistant coatings. As with aerospace, a large portion of coating application is performed by outside suppliers who in many cases have grown their businesses to support the needs of this market. With a recovery not project- ed until 2019 at the earliest, the outlook for thermal spray in support of industrial gas turbines is quite concerning. THERMAL SPRAY AND COLD SPRAY MARKET OUTLOOK Considering the divergence of the two largest market segments for thermal spray suppliers, how is this impacting the overall thermal spray market? For the most part, business has remained surprisingly strong apart from those companies with significant exposure to the power generation segment. The oil and gas market, after several years of pressure on oil prices, is showing real signs of a recovery. As a result, invest- ment in research and production is resuming. Within the auto- motive industry, new vehicle sales remain close to the record levels experienced in 2016, despite a slight year-over-year de- crease in 2017. Medical device applications for thermal spray coatings remain a stable and notable market. Lastly, carbides and other hardcoats are widely utilized in a variety of markets including mining and other heavy industrial applications. THE BEST OF TIMES AND THE WORST OF TIMES FOR THE THERMAL SPRAY INDUSTRY For those who are active within the thermal spray industry, the past 12 months have offered a dramatic mix of jubilation and concern over conditions within the global thermal spray market. Doug Puerta* President, ASM Thermal Spray Society 7 THERMAL SPRAY TRENDS *Member of ASM International