Superalloys refer to metal materials that can work at higher temperatures (600°C to 1200°C) and under stress, in which the high-temperature end parts of engines are currently the most important application scenarios. Superalloys have good structural stability and reliability at specific operating temperatures and have excellent performance in oxidation and corrosion resistance, fatigue performance, fracture toughness, and toughness, so they are mostly used in high temperature, high pressure, and complex and harsh working environments.
The world consumes about 300,000 tons of superalloy materials every year. From a domestic perspective, the superalloy market is growing rapidly, maintaining a growth rate of more than 20%, of which the growth rate in 2019 reached 29%. However, the gap between supply and demand is large, and import dependence is high. In 2018, the annual production of superalloy materials in China was about 35,200 tons, and the consumption reached 59,300 tons, which is in short supply. In 2019, China produced 27,000 tons of superalloys, and demand was 48,000 tons, in which imports accounted for 44% of total demand. Among them, aerospace and other military industries account for 55% of the demand, and civilian sectors such as electric power, machinery, metallurgy, automobiles, and petroleum and petrochemical industries account for about 45%.
The Aviation Field Is Developing Rapidly, And the Military and the Civilian Are Working Together
Aerospace was initially the largest demand market of superalloy, representing the cutting-edge technology level of the industry. At present, the high-pressure turbine blades of advanced aviation generators work at extremely high temperatures exceeding the melting point of the material. It is an inevitable development trend to greatly improve aviation performance through cooling technologies such as gas film and coating.
As the main raw material of the engine, superalloy accounts for more than 50% of the weight of the engine. Benefiting from the steady increase in China's military expenditure, the rapid growth in the number of military aircraft, and the acceleration of engine localization, the demand for superalloys in the upstream of the industrial chain is expected to accelerate.
In addition to military aviation development in the aviation sector, with the gradual maturity of domestically produced large aircraft, the domestic civil aviation market with an average annual demand of 356 billion yuan for superalloys will be opened in the next 20 years. According to relevant data, the Chinese aviation market is expected to receive 9,205 passenger aircraft with more than 50 seats in the next 20 years, corresponding to an engine market space of 2.54 trillion yuan, an average of about 127.2 billion yuan per year, which will bring about 76.3 billion yuan in superalloy demand per year. If the global market is considered, 45,459 new machines are expected to be delivered in the next 20 years, corresponding to a launch value of approximately 11.87 trillion yuan, an average of 593.4 billion yuan per year, and an annual demand for superalloy parts of 356 billion yuan.
Military Market: Terminal Demand in the Military Aviation Market Is Strong, And the Industrialization Capabilities Of Domestically-Made Aviation Development for Key Models Are Gradually Mature
In the statistics of the number of global military aircraft at the end of 2019, China ranked third, second only to the United States and Russia, again indicating that the domestic aerospace titanium material market has great potential.
According to "Aviation World", the maturity of the three generations of domestically-made aviation engines in the past was insufficient, and China has long purchased Russian AL-31F series engines in large quantities. In recent years, China has overcome key technologies such as precision casting of superalloy integral casings, remanufacturing of superalloy turbine blades, and remanufacturing of powder metallurgy turbine discs. The third-generation domestic aviation development has matured and began to be installed. Since 2015, imports of military engines of China continued to decline from USD 470 million. The first appearance of the Z-20 in the military parade on the 70th anniversary of the founding of the People's Republic of China shows that the supporting engines have matured and started to be installed in batches. The domestic aviation industry chain is also benefiting from the increase in localization.
Civilian Market: Domestic Aircraft Drives the Construction of Industrial Clusters, And Local Enterprises Are Embedded in the International Civil Aviation Industry Chain
As the world's largest civil aviation market, China has always been a competitive high ground for aerospace manufacturing companies such as Airbus and Boeing. To further seize the Chinese market, Airbus and Boeing have successively transferred passenger aircraft production facilities to the mainland due to factors such as cost control, political reciprocity, and geographical convenience. Besides, avionics, electromechanical, and other system supporting companies also hope to use the opportunity of establishing joint ventures in China to further establish production bases in China for global supply, such as the joint venture between GE and AVIC.
After decades of development, China has made great progress in the research and production of superalloys, basically forming a complete superalloy system, and forming a certain scale of production capacity. However, compared with the US and Russia, there is still a big gap in the level of superalloy technology and production scale.
At present, the international manufacturers engaged in the production of high-temperature alloy materials mainly include Special Metals Company, International Hannes Company, International Inco Company, Haomaite Company, Carpenter Company, etc. But because developed countries restrict technology exports, some products of some international competitors are not sold to China. Therefore, international competitors cannot pose a competitive threat to the domestic superalloy industry in the short and medium-term.
Many domestic companies have also put into production in the field of superalloys. There are two main types of domestic high-temperature alloy manufacturers. The first type is special steel manufacturers, in which high-temperature alloys are only a small part of their special steel business. and the R&D capabilities are relatively weak; the second category is scientific research units and their affiliated companies such as the Central Iron and Steel Research Institute, Beijing Institute of Aeronautical Materials, Shenyang Institute of Metals, Chinese Academy of Sciences, which have strong research and development capabilities and leading technology, but its special scientific research attributes make the production capacity relatively small.
The problem of process technology lagging behind production equipment is more prominent, so upgrading technology and technological innovation is the key to domestic special steel companies to enhance their core competitiveness. In the past two years, the R&D investment of local enterprises has continued to increase. It is worth looking forward to how much it can occupy in a market of this size.
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