The Pandemic Upends Business-as-Usual Scenario for Metal & Steel Processing Industries. Industrial Furnaces & Ovens Slumps by a Painful -16.9%
The global market for Industrial Furnaces and Ovens is expected to slump by -16.9% in the year 2020 and thereafter recover and grow to reach US$9 billion by the year 2027, trailing a post COVID-19 CAGR of 2% over the analysis period 2020 through 2027. The health of the industrial furnaces and ovens market is closely linked to the dynamics in key end-use markets such as construction, automotive, industrial, medical, and machinery, which in turn is dependent on the health of overall economy. Several macro-economic factors such as economic growth, consumer confidence, credit availability, fuel prices and capital investments in plant infrastructure have a considerable impact on the demand for industrial furnaces and ovens market. As the COVID-19 death toll continues to rise worldwide with the infections showing no signs of slowing down, a major change in priorities is underway as governments struggle amid the crisis to strengthen their healthcare systems. The rapid spread of the COVID-19 pandemic across the globe is anticipated to negatively impact the industrial furnaces and ovens market. Temporary shutdowns of factories and lockdown orders imposed by governments worldwide, coupled with US-China trade tensions have adversely affected growth prospects, especially in the Asia-Pacific region. In the U.S., COVID-19 outbreak is posing significant challenges for industrial manufacturers, particularly those depending on workers who cannot carry out their jobs remotely.

Amid the healthcare crisis, economic activity has slowed down significantly across most sectors, resulting in a considerable reduction in demand for industrial products. Certain large industrial manufacturers have shut down their facilities and are mulling job cuts in the near future. Partial or full plant closures are expected to continue for a longer period of time for manufacturers operating in worst-hit regions. The impact on manufacturers will mean crunch on capital resources; workforce layoffs/reduction and loss in productivity; supply chain disruptions; difficulties with funding; and increase in cybersecurity risks and fraud. Unlike IT services where work is being carried out remotely via internet and cloud platforms, for the manufacturing industry, plant activities and production cannot be carried remotely and therefore remains worst affected. The slower economic activity means reduced demand for industrial and consumer goods and lower manufacturing orders. Plant closures both full and partial are expected to continue into the coming months. Manufacturers, especially automotive producers with complex supply chains will be hard hit as transportation, trade and movement of goods continue to remain crippled. Social distancing norms are being strictly implemented with manufacturers under pressure to reduce worker density in factories.

The crumbling automotive and aviation industries and plummeting manufacturing activity in these industries is impacting demand for composites which in turn is taking the steam out of the industrial composite curing ovens market. Composites used widely in automobile, aircraft & ship manufacturing industries are suffering a major demand setback. Valued for its lightweighting benefits, composite consumption will continue to decline in the years 2020 & 2021 as manufacturing continues to plummet before making a U-shaped recovery that will be slow and patchy. In the upstream materials market, this scenario is negatively impacting composite cure ovens and furnaces used to cure high strength, low weight carbon composite materials. Composite ovens play a key role in composite manufacturing as curing determines performance such as longevity, corrosion and fatigue resistance of composites. In the post COVID-19 period, as the market returns to growth carbon fiber ovens will witness the highest revenue gains. Other factors which will drive demand growth during this period will include recovering demand for fabricated metal in automobiles; increased consumption of iron and steel in the infrastructure sector in developing countries; technology developments; and demand for a wide range of processed metal goods supported by continuous global economic recovery. Growing emphasis on sustainable industry policies and the resulting imposition of legislations that regulate the energy efficiency of large industrial furnaces will drive manufacturers’ focus on developing energy efficient solutions. Growing levels of investments in smart factories and Industrial Internet of Things (IIoT) will help drive demand for furnaces and ovens that are equipped with POC analyzers and temperature control features. As prices of digital hardware and software declines, microprocessor based controllers are expected to become a common feature in modern industrial furnaces in the coming years. The growing importance of preventative and predictive maintenance of furnace and ovens is forecast to generate lucrative opportunities for replacements and upgrades. Asia-Pacific will lead growth in the post COVID-19 period led by factors such as robust growth of manufacturing and processing industry in developing Asian countries; increased outsourcing of metal working operations to job shops in low cost South East Asian economies and the resulting increase in demand for Annealing Furnaces; Sintering Furnaces; Calcination Furnaces; and Tempering Furnaces, among others.