China’s foundry industry is at a critical transformation stage in 2026, featuring steady overall growth and structural divergence.

I. Industry Status

1. Market Scale and Demand

China’s casting output reached 52.18 million tons in 2025, with an industrial output value exceeding 580 billion yuan. The figure is projected to hit 609.7 billion yuan in 2026, a year-on-year increase of 4.7%, and the capacity utilization rate will rebound to 78.3%.

Market demand is mainly concentrated in three major segments:

• Driven by automotive lightweighting, aluminum alloy and high-strength ductile iron castings account for 38.2% of the total market.
• Orders for castings used in new energy power sectors (nuclear power and wind power) rose by 12.6%, with the procurement value of castings for a single nuclear power unit reaching 210 million yuan.
• Exports of construction machinery to Belt and Road countries grew by 9.4% year on year, with chassis and valve body castings as core products.

2. Industrial Structure and Policies

The number of foundry enterprises has dropped to 48,000, and over 2,000 backward enterprises will be phased out in 2026. Large-scale industrial enterprises account for more than 20% of the total. Industrial clusters in eastern China focus on high-end manufacturing, while central and western regions undertake industrial relocation.

The Ministry of Industry and Information Technology has taken measures to curb cut-throat price competition. New national standards for products such as magnesium alloy flat ingots have been officially implemented, forcing the whole industry to improve product quality.

3. Technology and Profitability

The penetration rate of intelligent production lines has exceeded 45%, and the accuracy of AI-based defect prediction stands above 95%. Environment-friendly production processes have cut carbon emissions by 30%, while annual investment in environmental protection rises by 8% to 10%. The per capita output value has increased by 30%. The overall profit margin of the industry remains at merely 3% to 5%, while that of enterprises undergoing transformation reaches 6% to 8%.

II. Development Prospects

1. Technological Upgrading

Artificial intelligence will evolve from auxiliary decision-making to autonomous optimization. More than 100 intelligent demonstration factories will be completed by 2028. By 2030, the industry’s carbon emissions will drop by 50% compared with 2020, and the resource utilization rate of waste will exceed 95%, making carbon-neutral factories the mainstream. High-performance alloys and composite materials will accelerate the popularization of functionally integrated castings.

2. Operational Model Transformation

Integrated die casting for new energy vehicles is reshaping traditional manufacturing techniques. Additive manufacturing and sand casting are developing in a complementary manner. A total of 34.5% of large-scale enterprises have transformed into service-oriented manufacturers. Revenue from technical solutions in high-end sectors takes up 28.7% of their total income, bringing a 10% to 15% premium on orders.

3. Market Divergence

Domestic substitution is accelerating in high-end markets including aerospace and semiconductor equipment, while low-end production capacity continues to be eliminated. The total number of foundry enterprises is expected to shrink to 10,000 to 12,000 by 2030.

III. Core Challenges

Surging environmental costs, shortages of professionals for intelligent manufacturing and volatile raw material prices, coupled with disruptive technologies such as integrated die casting, have greatly intensified survival pressure on small and medium-sized foundries. In contrast, enterprises with leading technologies and stable partnerships with high-end clients will reap dividends from industrial transformation.

Conclusion

The industry has bid farewell to the era of scale-driven growth and entered a new competition phase centered on technology, quality and service. Enterprises that embrace intelligent and green development and focus on high-growth tracks will emerge as winners in the future.