As Aircraft Lose Weight, Will Metal Service Centers Lose Revenue?

As Aircraft Lose Weight, Will Metal Service Centers Lose Revenue?

Aerospace equipment shipments are projected to see growth through 2022. However, as these aircraft are increasingly designed with lighter composite materials, metal service centers may have trouble adapting to this decline in demand from aircraft producers.

Aerospace Soars

Through 2022, aerospace equipment shipments are projected to rise at an annual rate of 3.1%. The domestic presence of a leading global manufacturer, Boeing, will support metal service center revenue growth. For example, in April 2018, American Airlines signed an order with Boeing to purchase 47 of Boeing’s 787 Dreamliners. In addition, in March 2018, Airbus and Bombardier announced a collaboration to bring another airline manufacturing facility to Mobile, Alabama. The facility will join Airbus’s existing facility, which began operation in 2015.

In aerospace equipment, metals are utilized in the fuselage, wings, engines, and other components. In October 2015, Reliance was awarded a five-year contract by Lockheed Martin to provide aluminum flat rolled material for the F-35 Joint Strike Fighter. The contract runs through December 2021.

Tempered Need for Metals

Despite increased aerospace equipment production, aluminum and other metals face competition from composites such as carbon fiber. Firms are increasingly utilizing more lightweight non-metal materials in aircraft. For example, Boeing’s 787 Dreamliner commercial aircraft family is designed to burn 20% less fuel than competitive aircraft, partly due to greater use of composite materials, which amount to 50% of the weight of the aircraft’s primary structure – the wings and fuselage. In contrast, Boeing’s older 777 aircraft featured only 12% composites by weight.

Companies in other industries such as motor vehicle manufacturing are increasingly employing lightweight composites in their products in order to meet federal regulations on fuel usage.

As the total amount of metal used in aircraft – as well as in motor vehicles – continues to fall, metal service centers must diversify their service offerings to retain their revenue share in the transportation segment. By offering additional services such as heat treating, coating, and electroplating, metal service centers are better able to secure contractual business agreements with firms like Lockheed Martin and Boeing.

Want to Learn More?

Don’t worry, we have you covered! For additional information and analysis of US industry trends, see Metal Services: United States, a report published by the Freedonia Focus Reports division of The Freedonia Group. This report forecasts to 2022 the revenues of US metal service centers in nominal US dollars at the wholesale level. Total revenues are segmented by product in terms of:

  • ferrous metals
  • nonferrous metals

Total revenues are also segmented by application as follows:

  • industrial
  • resale
  • construction
  • operations
  • export
  • other markets such as consumer and repair shops

This report also forecasts US metal coating and heat-treating revenues in nominal US dollars at the wholesale level to 2022. Revenues are segmented in terms of:

  • coating
  • electroplating
  • heat treating

To illustrate historical trends, total revenues and the various segments are provided in annual series from 2007 to 2017.

You can also check out some of our related reports, which include:

About the Author

Chris Dyer is a Market Research Analyst for Freedonia Focus Reports. He holds a Master of Arts in Security Studies, and his experience as an analyst covers multiple industries.