One Big Growth Room for the Honeycomb Ceramic Market

Honeycomb ceramic is a new type of porous structure ceramic with an internal structure similar to the honeycomb shape, and is a new material used in the field of environmental protection. The continuous upgrading of China's environmental protection laws and regulations has laid the foundation for sustainable development. Due to the high technical barriers of the honeycomb ceramic industry, more than 90% of the Chinese honeycomb ceramic market is occupied by Corning of the United States and NGK of Japan. Benefiting from the upgrade of the National Six Standards of automobile exhaust and the continuous technological advancement of local enterprises, the penetration rate of my country's domestic honeycomb ceramic market will gradually increase.

The Environmental-Friendly Honeycomb Ceramics Is Supported by Policies

As a new material in the field of environmental protection, honeycomb ceramics play a key role in the development of green manufacturing and promote the development of energy-saving and environmental protection industries. Therefore, the Chinese government has adopted a series of support measures to promote the development of the industry.

At the national policy level, in January 2016, a number of government departments jointly issued a document that listed the extrusion molding honeycomb ceramic regenerator preparation technology as a key national support high-tech field, and high-tech enterprises recognized according to the method passed the application Can enjoy various tax preferential policies. This policy has a positive role in encouraging enterprises in the industry to continue to carry out research and development of honeycomb ceramics and the conversion of technological achievements. Encouraged by national policies, the honeycomb ceramic industry has a promising future.

Honeycomb Ceramic Industry Chain

The industrial chain of China's honeycomb ceramic industry is divided into three parts. The upstream participants are suppliers of chemical raw materials and production equipment, the midstream participants are manufacturers of honeycomb ceramic products, and the downstream participants are manufacturers of automobile catalysts, industrial exhaust gas purification devices, and waste incinerators.

The upstream raw materials of honeycomb ceramics mainly include kaolin, zeolite, talc, bauxite, additives, etc., which together account for about 48% of the production cost of honeycomb ceramics, and the cost is relatively large. The key equipment for honeycomb ceramic production includes a raw material mixing system, a continuous extruder, and a fully automatic shuttle kiln. The total manufacturing cost accounts for 42% of the total cost, and the labor cost accounts for about 10% of the total cost.

Strong Import Dependence on High-Quality Raw Materials

Domestic enterprises have increased their dependence on foreign imports of high-quality raw materials. Take kaolin as an example. Kaolin is a key raw material for preparing honeycomb ceramics, and its quality has a great influence on the performance of honeycomb ceramics. Although China is rich in kaolin resources, it is mainly washed kaolin and hard coal kaolin, both of which have different degrees of use defects. First, the crystal structure of washed kaolin is tubular or needle-like, which is difficult to meet the requirements of honeycomb ceramic sheet crystal structure; second, the internal fluidity of the split particles of hard coal-based kaolin is low, which makes the kaolin sheet structure poor in the direction of extrusion. At present, the high-quality kaolin used in high-performance honeycomb ceramics is distributed in the United States, and Brazil.

Midstream: Market Size and Pattern

As a key material for various environmental protection equipment and energy-saving equipment, honeycomb ceramics are supported by a wide range of environmental protection needs from many industries such as automobiles, petroleum, and chemicals. With the support of national environmental protection policies and the continuous upgrading of laws and regulations, China's honeycomb ceramic industry has driven the continuous expansion of the honeycomb ceramic market. According to sales statistics, from 2014 to 2019, the size of China's honeycomb ceramic market increased from 2.86 billion yuan to 5.5 billion yuan, with a compound annual growth rate of 14.0%. In the next five years, thanks to the tightening of environmental protection supervision and the arrival of the National Sixth Standard, the internal combustion engine vehicle market will drive the demand for new cars and the replacement demand of the stock market. The honeycomb ceramic market penetration rate will expand, and the honeycomb ceramic market space will gradually expand. The market size of China's honeycomb ceramic industry is expected to reach 7.6 billion yuan in 2021, maintaining a compound annual growth rate of 18.7%.

China's honeycomb ceramics presents a completely different competitive landscape in different product segments.

Since the honeycomb ceramic regenerator belongs to the low-end field, the capital and technology threshold is low, the industry has a large number of enterprises, most of which are small and medium-sized enterprises, the market structure is scattered, and the degree of concentration is low. Due to fierce market competition, various companies adopt a low-price competition strategy, and the overall profit rate of the industry has dropped to about 10%, with low added value.

In the high-end field, there is a highly concentrated pattern of duopoly. About 90% of the market share is occupied by Corning and NGK. The number of domestic companies that can produce high-end honeycomb ceramic carriers is small. But the market share of domestic honeycomb ceramics will benefit from the growth of downstream market demand and will gradually increase.

National VI standards are becoming stricter, and the upgrading of automobile exhaust purification will increase the consumption of honeycomb ceramics. In order to meet the pollutant emission limit of the National Sixth Standard, gasoline vehicles and diesel vehicles will add corresponding catalysts to meet the emission limit requirements. As an important part of automobile exhaust catalysts, honeycomb ceramics have been used in various automobile exhaust system catalysts. As a mandatory national standard, the National Sixth Standard has a mandatory enforcement effect, thereby increasing the amount of honeycomb ceramic carriers.

The automobile industry provides a broad market space for the development of honeycomb ceramics. According to data, as of September 2020, China's car ownership has reached 275 million.

Overseas giants have long monopolized the core technology and product market of automobile exhaust gas purification treatment, which have enjoyed the dividend of the rapid development of the automobile industry. As Chinese companies continue to break through the technical barriers of the high-end market, as well as the drive of the National Sixth Standard, domestic high-end honeycomb ceramics will develop rapidly.