On August 5, 2026, OceanRing Asia Pacific Finance released its Mid-Year Special Observation Report, providing a comprehensive review of the first half of the year's casting market performance in the Asia Pacific region and offering a forward-looking analysis of industry trends for the second half. The report indicated that, driven by multiple factors such as automotive lightweighting, AI infrastructure construction, and regional supply chain restructuring, the Asia Pacific casting market maintained robust growth. Demand for lightweight materials like aluminum and magnesium alloys significantly increased, positioning digitalization and green transformation as core competencies for the industry.
Market Review for the First Half: Demand Structure Optimization and Accelerated Regional Restructuring
In the first half of 2026, the output value of the casting industry in the Asia Pacific region grew by approximately 6.8% year-on-year, an increase of 1.2 percentage points compared to the same period in 2025. China, Japan, South Korea, and Southeast Asian major producing countries contributed the vast majority of this growth. Notably, the utilization rate of casting capacity in India and Vietnam significantly improved, making them important beneficiaries of multinational corporations diversifying their supply chain layouts.
Automotive Lightweighting Drives an Explosion in Aluminum and Magnesium Alloy Castings
As the penetration rate of new energy vehicles continues to rise, integrated die-casting technology is moving from concept to mass production. In the first half of the year, demand for aluminum alloy castings in the Asia Pacific region increased by 12.3% year-on-year, while magnesium alloy castings grew by 18.7%, setting a near five-year high. Major automakers such as Tesla, BYD, and Toyota have all increased their procurement of lightweight castings in the Asia Pacific region, keeping the capacity utilization rate of related die-casting enterprises above 90%. Order backlogs at renowned Japanese die-casting machine manufacturers, such as Toyo Machinery Metal and Shibaura Machine, extend into the first quarter of 2027.
AI Data Centers Create a New Niche for High Thermal Conductivity Castings
The continuous increase in the power density of artificial intelligence servers places higher demands on precision castings used in cooling systems. In the first half of the year, the demand for high thermal conductivity aluminum alloy castings, liquid cooling plates, and related components serving data centers showed explosive growth, becoming a new profit growth point for the casting industry. High thermal conductivity aluminum alloy materials co-developed by enterprises in Thailand and Japan have been mass-applied in data center projects of several cloud service providers.
Green Transformation Accelerates, Sustainable Casting Becomes a Hard Requirement
In the first quarter of 2026, the carbon emission intensity of the casting industry in the Asia Pacific region decreased by 5.2% year-on-year, and the proportion of renewable energy sources surpassed 30% for the first time. This change is not only due to environmental policy pressure but is also closely related to the strict requirements of downstream customers regarding supply chain carbon emissions. Leading automakers in Europe and North America have required their primary casting suppliers to achieve carbon neutrality before 2030, and Japanese and Korean electronics brands have also incorporated the carbon footprint of the casting process into their procurement evaluations.
Against this backdrop, green processes such as short-process steelmaking using electric arc furnaces, recycled aluminum utilization, and hydrogen energy heat treatment are accelerating in popularity. Several large casting enterprises in China have announced plans to build "Zero-Carbon Casting Factories," and the revised edition of the Green Casting Factory Evaluation Standard, issued by the China Casting Association, officially took effect on July 1, providing a unified standard for the industry.
The Digitalization Wave Reshapes Casting Production Models
2026 is considered a "watershed moment" for the digital transformation of the casting industry. In the first half of the year, over 40% of medium and large casting enterprises in the Asia Pacific region had deployed Manufacturing Execution Systems (MES) or Enterprise Resource Planning (ERP) systems, and the application of technologies such as digital twins and AI quality inspection has expanded from leading enterprises to medium-sized enterprises. In the 3D printing casting sector, sand casting 3D printing efficiency has increased by about 25% compared to 2025, with costs dropping by nearly 30%, and it has begun to enter the mass production phase for small-batch complex castings. Several Japanese casting companies have jointly developed precision casting 3D printing processes for aerospace and medical fields, which are expected to achieve commercial breakthroughs within the year.
Capacity Investment: Southeast Asia and India Emerge as Hotspots
In the new casting capacity projects announced in the Asia-Pacific region in the first half of the year, Southeast Asia and India accounted for a total of 55%. Thailand, Vietnam, and Malaysia have attracted a large amount of direct investment from Japan, South Korea, and China due to their geographical advantages and trade agreement benefits. A major Japanese casting giant has established a factory in Vietnam to produce 50,000 tons annually of aluminum alloy castings for the Southeast Asian automotive and electronics industries.
India, meanwhile, has become the fastest-growing country in casting capacity expansion, relying on its large domestic market and policy incentives. Multiple automotive and engineering casting projects have landed in states such as Gujarat and Maharashtra, and it is estimated that India's casting capacity will increase by about 12% by the end of 2026.
Risks and Challenges: Coexisting Cost Increases and Trade Barriers
Despite the overall positive trend, the Asia-Pacific casting industry still faces multiple pressures. Raw material prices, such as magnesium and silicon iron, fluctuated sharply in the first half of the year, compounded by high energy costs, putting significant pressure on corporate profit margins. Furthermore, discussions among major economies regarding rules of origin and carbon tariffs are becoming increasingly intense, potentially reshaping regional trade flows over the next two years.
In the first half of the year, the United States initiated an anti-dumping investigation into casting products from some Southeast Asian countries, involving categories such as aluminum alloy wheels, which introduced uncertainty for related enterprises' exports. India also raised import tariffs on certain castings to protect its domestic industry. These factors have prompted multinational casting enterprises to accelerate the evaluation of supply chain layouts.
Outlook for the Second Half: High-Quality Development Driven by Technological Innovation
Looking ahead to the second half of 2026, the OceanRing Asia-Pacific Research Department believes that the Asia-Pacific casting market will show the following trends:
Integrated die casting is evolving toward larger and more complex structures: Over 6,000-ton die casting machines are being put into operation, and integrated casting parts for new energy vehicle chassis will further reduce manufacturing costs.
Deep integration of AI and casting: Process optimization systems based on machine learning will become widespread in large enterprises, with yield expected to improve by 2-3 percentage points.
Green casting is becoming a competitive threshold: Carbon footprint tracking systems will become standard equipment for export-oriented casting enterprises, and the green premium is gradually becoming visible.
Regional supply chain "nearshoring": Multinational corporations will be more inclined to establish casting capacity near consumer markets, further strengthening the hub status of Southeast Asia and India.
Demand for special castings is rising: The demand for high-precision, high-performance castings from emerging fields such as semiconductor equipment, humanoid robots, and hydrogen energy equipment will maintain double-digit growth.
In a globally uncertain environment, the Asia-Pacific casting industry is demonstrating strong resilience and vitality through its complete industry chain, rapid technological iteration capabilities, and deepening green practices. For investors and corporate decision-makers, grasping structural growth tracks and paying attention to technological changes and policy dynamics will be the key tasks for the second half of the year.
