Market Overview 1

INVESTMENT CASTINGMARKET OVERVIEW

NORTH AMERICA

Scott HansonPresident

Auburn Investment Casting

Market Overview 2

Investment Casting Trends

North American Investment Casting Industry

“Across the Board” increase in activity

Foundries & Suppliers are busy

Raw Material Cost/Availability

Energy Cost

Offshore Sourcing

Market Overview 3

Investment Casting Trends - cont’d

Segment summary

Aerospace – commercial – record level of new orders military – D.O.D. in transition

IGT – Significant spare part demandNew Build Growth forecasted for Asia, Mid-East & Africa

Automotive - activity in complex applications& Turbocharger Systems

General Industry – growing with overall economy

Market Overview 4

Market Segments

Aerospace

Jet Engine Blades & Vanes (Airfoils) Integral Wheels & Nozzles Hardware and Structures

Airframe Hardware and Structures

Missile & Rocket Components Other Military Ordnance

Market Overview 5

Market Segments

Industrial Gas Turbines

Blades & Vanes (Airfoils) Hardware and Structures Turbine and Combustor Components

Market Overview 6

Market Segments

Automotive

Valves Turbocharger Components Complex Powertrain Parts Chassis Applications - Passenger Car and Motorcycle

Market Overview 7

Market Segments

General Industry

Medical Implants, Instruments & Testing Equipment Industrial Valves / Pumps Petrochemical Food Processing Off-Road Equipment Firearms Construction Equipment Hand & Power Tools Recreational & Sporting

Market Overview 8

North American IC Industry

United States, Canada & Mexico

Approx. 46% of worldwide investment casting production

130 companies

170 foundries (not including dental, art or jewelry)

30,000+ direct workers

All market segments

All ‘castable’ alloys

All size capability

Market Overview 9

North American Investment Casting2005 Sales ($ Million - USD)

Aerospace 1,600

IGT 800

Automotive 250

General Industry 550

TOTAL: $3,200 Aerospace50%

IGT25%

Auto8%

General Industry

17%

Market Overview 10

North American Investment Casting Market by Alloy Type

Aluminum & Copper: 7%

Titanium: 9%

Steel: 33%

Superalloy: 51%

2005 Casting Dollars$3.200M

Steel

Titanium

Aluminum & Copper

Superalloy

Market Overview 11

2005

North America 3,200

Europe 1,700

Asia 2,000

Other 100

TOTAL: 7,000

Worldwide Investment Casting ($ Million - USD)

Market Overview 12

New Aircraft Builds> 50 Passenger

Aerospace - Commercial

Large Transports

World traffic up 6%

Load factors & New

Orders at Record Level

2005-2009 build

forecast avg. 970 / year

Asian Market Growing

Rapidly

New Programs

A380 / 747-8

A350 / 787

China Regional

0

300

600

900

1200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009ROM Associates: 2- 06

Market Overview 13

Aerospace – Commercial cont’d

Concerns / Issues:

Airline losses continue

High Fuel Prices

Several US Airlines in Chapter 11

Airlines adopting the ‘Low Cost Business Model’

Market Overview 14

Aerospace – Commercial cont’d

Business Jets

New orders up significantly

Delivery of new aircraft 30% higher

Corporate ownership/leasing & Fractional Shares

Increased demand for used aircraft

Airframe & Engine Manufacturers very busy

Private Jets

New Market starting to develop

Low cost replacement for some General Aviation models

Market Overview 15

Aerospace - Military

Increase proposed for D.O.D Budget

Demand for engine spare parts for Fighter, Helicopter & Transport aircraft

Some Advanced Aircraft Programs being pushed out

Future Combat Systems- Smart Munitions - Lightweight Armament- Battle Field & Ship Board

Applications

Market Overview 16

Industrial Gas Turbines

High Spare Parts Demand

Increase in Aero derivatives

Growing ‘After Market’ Business

Large Frame Growth in Asia, Mid-East & Africa

Limiting/Competing factors Infrastructure for NG Price / Availability of NG

Future Technology: Wind Power Coal Gasification

0

300

600

2001 2002 2003 2004 2005 2006

New Land-basedTurbine Builds – 50MW +

2-06 Consensus Industry Forecast

Market Overview 17

Automotive

New Investment Casting Applications

Design Activity in Commercial Trucks, Passenger Cars & High Performance Vehicles

Driven by new emission standards and fuel efficiency

Turbocharger Demand straining capacity

Titanium Alloy components growing

Market Overview 18

General Industry

Dispersed among many casting suppliers

Wide range of size & alloys

Applications across all industries

Many Niche opportunities

High volume applications susceptible to offshore sourcing

Overall, should continue to increase with growth in economy

Market Overview 19

Aerospace 1,725 8%

IGT 850 6%

Automotive 265 6%

General Industry 570 3.5%

TOTAL: 3,410 +6.5%

% Change

North American Investment Casting2006 Estimated Sales ($ Million - USD)

Market Overview 20

Opportunities for Consideration

- Machined Parts- Finished / Ready to Assemble - Low Volume & Custom Parts- Military Munitions & Support Equipment- Military Spares- ‘After Market’ for Aerospace & IGT- Medical Instruments & Testing Equipment- Conversions from other processes- Combining Multiple Parts into Integral Casting- Higher Value Alloys- Larger Castings- International Customers- Die Casting Prototyping

Market Overview 21

ICI + 6.5

GDP + 3.5

Ind. Production + 3.8

DeWolf - Commercial + 4%

SFSA +10%

BICTA + 8%

% Change

2006 Forecast Comparison

Market Overview 22

Summary

Overall North American IC growth will continue

All Market Sectors will benefit

Off-Shore Sourcing effect on N. American foundries?

Some concern with Raw Materials & Energy

Opportunities for New Casting Applications

Need to focus on market Niches & Supplying Value Added Features / Services

Market Overview 23

Acknowledgement

The Investment Casting Institute wishes to acknowledge the

following companies for their contribution to this report.

- Alcoa Howmet

- Blayson Olefines, LTD.

- Doncasters Inc.- ESCO Turbine Group

- Hitchiner Mfg. Co.- ROM Associates