The consumption of tungsten for China’s carbide accounts for more than 50% of the total tungsten powder consumption, and its development is of great significance to the entire tungsten processing industry. China’s carbide industry started in the early 1950s and has achieved remarkable results over the past 60-odd years. According to statistics, the annual output of China’s carbide was approximately 22 kt in 2015, with a year-on-year growth of 13.33%. Among this output, the proportions of rock drilling tools, wear-resistant parts, and cutting inserts were 31.86%, 35.40%, and 28.33% respectively, while other products accounted for 4.41%.
Although China is the world’s largest producer of cemented carbide, with its total output accounting for more than 40% of the world’s total in 2018, its total output value is less than 20% of the world’s. The products are mainly medium and low-grade, and the quality of high-performance, high-precision, and high-value-added products needs to be improved. Moreover, the deep processing of cemented carbide cannot meet the growing demand of the domestic manufacturing industry for high-end cutting tools. This article aims to analyze the current supply and demand situation of the cemented carbide market and the industry’s prospects, so as to provide ideas and suggestions for the development of the industry.
By the end of 2018, the annual production capacity of APT (Ammonium Paratungstate) of 55 domestic tungsten smelting enterprises had reached 180 kt/a. The annual production capacity of tungsten powder of 70 tungsten powder production enterprises was 61.6×10³ t, and the annual production capacity of tungsten carbide was 35×10³ t. Despite the considerable production capacity of tungsten carbide, the quality of most tungsten powder and tungsten carbide powder is poor, which can only be used in the production of medium and low-grade cemented carbide products and is difficult to meet the demand of the high-end market. This leads to a situation where the high-end market is in short supply, while the low-end market is oversupplied with fierce competition.
Overall Market Situation
In 2018, the global sales volume of cutting tools exceeded 13 billion US dollars, with the three major industrially developed markets of Europe, North America, and Japan-Australia accounting for 75%-80%. The annual demand for cemented carbide tools in China was between 9 billion and 10 billion RMB, among which 90% of high-end CNC cutting tools and more than 90% of high-precision drilling tools relied on imports. In 2018, the annual production and sales volume of the global cemented carbide market was approximately 45 kt, and China’s annual output was 22 kt, accounting for 50% of the world’s total output, with a year-on-year growth of 33.33%. Among China’s carbide output, the proportions of mining alloys, wear-resistant parts, cutting inserts, and other special-shaped cemented carbide products were 31.86%, 35.40%, 28.33%, and 4.41% respectively.
Rock Drilling Tools
These tools inlaid with cemented carbide, such as drill bits and DTH (Down-the-Hole) bits, are widely used in mineral mining and other fields. The world’s rock drilling tool manufacturing centers are mostly located in developed countries in Europe and America. Enterprises such as Sweden’s Sandvik account for about 70% of the global market output, while the other approximately 200 manufacturers have a small market share. China’s carbide rock drilling tools account for less than 5% of the world market, and there is a large quality gap compared with foreign products. In 2019, the total output value of 200 Chinese rock drilling tool enterprises was approximately 8 billion RMB, which was only equivalent to the output value (7.5 billion RMB) of the rock drilling tools of Sweden’s Sandvik alone. Currently, there are nearly 200 domestic brazed steel rock drilling tools enterprises in China, with an annual output of about 60 million various drill bits and an output value of 1.7 billion RMB. Among these drill bits, the number of low-tech sheet drill bits is about 37 million, while the output of high-end threaded connection button bits is only 1.6-1.7 million, which cannot meet the needs of large-scale mechanized mining. With the increase in the impact power of large rock drilling machinery, the demand for high-air-pressure DTH bits is expected to reach 3 million per year, and they will also replace some low-air-pressure DTH bits. However, at present, the quality of domestic high-air-pressure DTH bits is unstable and their production capacity is insufficient (only 350,000-400,000 per year), while the production capacity of low-air-pressure DTH bits is seriously oversupplied.
China’s Carbide Cutting Inserts
The global annual consumption of cutting tools is approximately 5.28 billion US dollars, among which turning tools account for 50%, milling tools for 30%, drilling and reaming tools for 15%, and parting and grooving tools for about 5%. The global cemented carbide CNC insert market is highly competitive and tends to be grouped, mainly monopolized by Sweden’s Sandvik Group, the United States’ Kenna Metal, and other companies. The member countries of ECTA (European Cutting Tool Association), which represents manufacturers of cutting tools and workholding devices, have more than 60,000 employees in the industry, with an annual sales volume of more than 7 billion euros (including 5 billion euros for cutting tools and 2 billion euros for workholding devices). The annual demand for CNC inserts in the domestic market exceeds 2.5 billion RMB and is growing at a rate of more than 15% per year. However, domestic CNC inserts cannot meet the market demand in terms of output and performance. International multinational tool enterprises have seized more than 90% of the domestic market share, among which Sandvik Group accounts for about 35%. Major domestic cemented carbide manufacturers, such as Zhuzhou Cemented Carbide Group, are increasing investment to build production lines for high-end CNC inserts.
Integral Cemented Carbide Cutting Tools and Cutting Drills
In 2019, the global sales volume of integral cemented carbide drilling and milling tools exceeded 6.5 billion US dollars, with the three major markets of Europe, North America, and Japan-Australia accounting for 70%-80%. China is an important and rapidly growing market. Among high-performance ultra-fine cemented carbide rods, the global annual consumption of fine rods for micro-drills and high-performance rods for integral tools is approximately 10 kt, of which about 6 kt are domestically produced (80% are medium and low-grade products). High-end products such as ultra-fine alloy rods cannot be produced domestically, with an annual import volume of about 1 kt. In addition, high-performance cemented products such as high-speed wire rod rolls and large pressure cylinders for synthetic diamonds also mainly rely on imports, with a total volume of about 60 t per year.
Global tungsten consumption is concentrated in China, Europe, the United States, and Japan. From 2015 to 2020, global tungsten consumption increased from 53.1 kt to 71 kt, with an average annual growth rate of 4.3%. It is expected that the annual growth rate will remain at about 4% in the future, and the global tungsten consumption will reach 91 kt by the end of 2020, among which the consumption of tungsten carbide will reach 45 kt.
With the advancement of China’s industrialization and urbanization, industries such as iron and steel, automobiles have brought development opportunities to the tungsten industry. High-performance tungsten-based alloy materials are indispensable in many fields, and the growth of special steel grades in the iron and steel industry also promotes the development of the tungsten industry. It is expected that the domestic demand for tungsten carbide products will reach 25 kt in 2020, with an annual growth rate of 5%-8%, and the quantity of high-performance tungsten powder and tungsten carbide powder will exceed 50% of the total tungsten consumption.
Output Scale
China’s carbide output exceeds 1/3 of the world’s total, approximately 15 kt. In terms of production scale and output, China is truly the world’s largest producer of cemented carbide.
Equipment and Process Technology
In recent years, the technical level of production equipment in the domestic cemented carbide industry has been improved, creating favorable conditions for the equipment renewal and upgrading of cemented carbide enterprises. Some enterprises with strong strength have taken measures such as technology introduction, import and transformation of production equipment, and research on process technology, which has significantly improved the overall level of the industry. With the application of a series of advanced equipment and process technologies such as automatic powder making equipment, high-efficiency ball mills, high-performance spray drying and granulation, high-precision electric presses, vacuum sintering integrated furnaces, and physical and chemical coating equipment, the product quality has been gradually improved.
Recycling and Utilization of Waste Cemented Carbide
Due to the strategic position of tungsten resources, domestic enterprises have been paying increasing attention to the utilization of waste tungsten. Only through processes such as electrolysis and zinc dissolution to recover raw materials such as tungsten carbide, cobalt oxalate, and mixed materials from waste cemented carbide, the annual output of low-grade cemented carbide products is about 3 kt, accounting for about 20% of the total output. These alloys not only enable the rational utilization of valuable tungsten resources but also provide some enterprises with cemented carbide products with reasonable cost performance.
China cemented carbide industry still does not have a high-level professional R&D institution, which is far behind foreign enterprises. The R&D capabilities of domestic cemented carbide processing enterprises are still weak, and there is insufficient product innovation, which directly affects the technological upgrading and other transformations of enterprises due to the lack of process technology support.
Low Industrial Economic Benefits
Although China’s carbide industry has a large scale, due to insufficient production capacity of high-value-added and supporting deep-processed products, inadequate deep-processing support, and incomplete product varieties, the benefits of cemented carbide manufacturers are generally lower than those of advanced foreign counterparts.
The cemented carbide market has become increasingly internationalized. Well-known domestic manufacturers include Zhuzhou Cemented Carbide Factory, Zigong Cemented Carbide Factory, Xiamen Golden Egret Special Alloy Co., Ltd., and Zhangyuan Tungsten Industry Co., Ltd. In the long run, the development of China’s carbide market industry needs to adhere to the following points:
Strengthening the Construction of R&D Capabilities
Enterprises need to establish a development concept that combines independent development with technology introduction. Simply introducing equipment is not conducive to the formation of independent development and innovation capabilities. Therefore, while digesting and absorbing imported technologies, enterprises should increase the construction of their own research and development capabilities.
Seeking Government Support
At present, there is a large demand for high-precision and high-performance cemented carbide deep-processed products at home and abroad, but there are not many manufacturers that can produce high-performance products in large quantities and in an all-round way. The production technology of high-precision and high-performance cemented carbide is still under continuous exploration and development. Obtaining policy and financial support from national and local government science and technology and industrial departments will help enterprises quickly form independent innovation capabilities.
Strengthening the Integration of “Industry-University-Research-Application”
At present, the technical strength of China’s carbide deep processing enterprises is still weak. Production enterprises need to form a long-term and stable industry-university-research-application cooperation system with universities and research institutes. They should give full play to the scientific and technological development capabilities of universities and research institutes to enhance their own strength.
Aiming at the International Advanced Level and Accelerate the Adjustment of Product Structure
The development of China’s carbide industry needs to avoid blind investment and expansion of production capacity. Instead, it should adjust the product structure in phases, replace high output with high added value, and gradually replace imported products. Thus, it can change the awkward situation of vicious competition in the low-end market and monopoly of the high-end market by foreign manufacturers in China’s cemented carbide deep processing industry.
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