Machinery / Industrial Parts & Tools

The latest data from the Tool Branch of the China Machine Tool Industry Association shows that the total consumption scale of my country's tool market is gradually expanding, and important types such as carbide tools and high-speed steel tools have also developed by leaps and bounds, and are extending to the high-end market.

The tool market accelerates the realization of import substitution

The data shows that the total consumption scale of my country's tool market has increased from 42.1 billion yuan in 2020 to 47.7 billion yuan in 2021, a year-on-year increase of 13.3% and a new high. Among them, domestic knives accounted for about 33.9 billion yuan, accounting for 71%, a year-on-year increase of 17%; imported knives, including foreign brands produced and sold in China, 13.8 billion yuan, accounting for 29%, a year-on-year increase of 5.3%. Domestic knives have grown significantly in the Chinese market, and their proportion has increased by 2 percentage points compared with 2020. After two consecutive years of decline, imported knives grew at a low speed, and the proportion decreased by 2 percentage points compared with 2020.

The total scale of my country's tool imports (including foreign brands produced and sold in China) will increase from 13.1 billion yuan in 2020 to 13.8 billion yuan in 2021, a year-on-year increase of 5.3%. The association stated that there is a certain difference between import data and customs data (including year-on-year growth) because the statistical caliber is not completely consistent, and foreign brands are produced and sold in China. my country's tool exports will increase from 18 billion yuan in 2020 to 22.5 billion yuan in 2021, an increase of 25.45%.

In recent years, on the basis of continuously introducing, digesting and absorbing foreign advanced technology, domestic tool companies have greatly improved their research results and development and production capacity. While the ability to control tool performance has been continuously enhanced, some well-known domestic tool manufacturers have also With its deep understanding of customer needs and high research and development strength, it can provide downstream users with personalized cutting solutions. Domestic knives have extended to the high-end market. With the advantage of product cost performance, the import substitution of high-end imported knives has been gradually realized, which has accelerated the localization of the knives market.

Carbide cutting tools drive the rapid expansion of production capacity

With the progress of my country's manufacturing industry, the demand for cemented carbide tools continues to grow. In recent years, my country's cemented carbide tool industry has made significant progress in materials, coatings, process equipment, etc., which has driven the rapid expansion of production capacity and attracted capital attention to accelerate the process of production expansion.

Carbide cutting tools with large production and sales volume and rapid development are two types of cutting tools, one is solid carbide round shank tools (hereinafter referred to as hard whole tools), mainly milling cutters and drills; the other is CNC inserts.

The main user fields of the whole hard tool are 3C, mold, transportation, aerospace, etc. represented by mobile phones. my country is a big country in the production of mobile phones, and the amount of hard cutting tools is huge, which is one of the main reasons why international tool giants speed up the acquisition of hard cutting tool companies in my country.

The 3C industry represented by mobile phones is highly cyclical and the product design is updated quickly, which makes the demand for such tools fluctuate greatly. Rapid growth in 2017 and 2018, a sharp decline in 2019, a rapid rebound in 2020, rapid growth in the first half of 2021, and a slowdown in the second half.

The raw material of this type of tool is cemented carbide bar, and the market demand can be seen from the output of the bar. The national annual output of bars was 11,000 tons in 2018; 8,321 tons in 2019, a sharp drop; 11,000 tons in 2020; and 14,600 tons in 2021.

The entry threshold of the whole hard tool is low, and the main processing equipment is CNC tool grinder. The fast-growing market demand has made the production capacity of such tools expand rapidly, and a large number of small and medium-sized enterprises have begun to produce such tools. Therefore, the price competition is fierce, and some companies have poor profitability.

The high-end user fields, such as aerospace, are still dominated by imported brands.

Another type of carbide tools is CNC inserts. CNC inserts are products with high added value, and are also the tool variety with the largest import volume. In recent years, the production and sales of CNC blades in my country have continued to grow, even in 2019 when the entire industry is adjusted. According to the survey, the production and sales volume of CNC blades in my country was 235 million in 2018, 250 million in 2019, 300 million in 2020, and 450 million in 2021. From 2021 to 2022, capacity expansion will further accelerate. According to the 2021 annual report of the Tool Branch, the current average unit price of CNC blades in the industry is less than 7 yuan per piece.

my country's CNC blades are cheap and high-quality, and have made great contributions to improving the efficiency of the manufacturing industry. Due to its high added value, at present, most blade manufacturers have better profitability. However, from granulation, pressing, sintering, grinding to coating, the product has a long process chain and large equipment investment, which is a capital-intensive product. Moderate capacity expansion can promote competition and facilitate the high-quality development of the industry; however, excessive expansion is not conducive to the sustainable and healthy development of the industry.

The gap between this type of products and the international advanced level is mainly due to original solutions and supporting capabilities, service and quality stability, which is also one of the main reasons for the huge price difference between domestic and foreign blade products.

High-speed steel tool leading enterprises have stable profits

From 2018 to 2020, my country's high-speed steel production has remained basically stable, with a slight increase in 2021. In terms of high-speed steel cutting tools, there are not many new companies entering the industry in recent years, the industrial structure has not changed much, and the profitability of leading companies is stable.

The more advantageous varieties of high-speed steel tools are mainly taps, broaches and medium-modulus gear tools, among which the production and sales of taps are the largest. In 2021, my country will import 1.07 billion taps and export 780 million yuan (including a small amount of alloy taps), with a 10-fold difference in the unit price of import and export. High-end taps have great market potential, which is one of the reasons why some companies have newly entered the field of tap products.

In terms of variety changes, the small and medium-sized high-speed steel drills and milling cutters were partially replaced by solid-hardened tools, and the medium-large-sized drills, milling cutters and gear cutters were partially replaced by indexable carbide tools.

The development of high-speed steel cutting tools in recent years is mainly manifested in the progress of raw materials, the progress of process equipment and the optimization of subdivision fields.

40% of the total production capacity of cutting tools in my country is exported, among which the export volume of drill bits is the largest, accounting for nearly 40%. In 2021, my country's drill bit exports will be 8.6 billion yuan, mainly high-speed steel (including alloy high-speed steel) drill bits. my country is the main producer of such tools, and the main export enterprises have stable profits.