Industrial Chain Analysis of China’s Cemented Carbide Industry

Cemented carbide industry chain structure


Cemented carbide is made of tungsten carbide powder (hardening phase) of high hardness refractory metal as the main component, cobalt, nickel and other metals (bonding phase) as binder, and is formed by ball milling, pressing and sintering with extremely high Alloy material with hardness and good wear resistance. Usually, the hardening phase is mainly tungsten carbide, titanium carbide, etc. The hardening phase determines the hardness and wear resistance of the cemented carbide. The binder phase mainly acts as a bond, bonding the hardened phases together, and contributing toughness to the cemented carbide. In the cemented carbide industry chain, the upstream is mainly tungsten ore, cobalt ore mining, tungsten carbide, cobalt powder, etc.


Analysis of Cemented Carbide Upstream Industry


In the cost composition of cemented carbide, material cost accounts for a relatively high proportion, and raw materials account for about 70% of its production cost. As the main raw materials of cemented carbide, tungsten carbide and cobalt powder are rare and non-renewable metals. Although they are widely distributed, the content of tungsten ore is relatively low, and it is difficult to mine, and because the state controls the total amount of tungsten mining, the supply side is relatively stable, and changes in market demand and inventory have a greater impact on prices. In 2020, the production capacity of tungsten concentrate will be 173,000 tons, and that of tungsten carbide will be 80,000 tons.


Midstream Industry Analysis


Cemented carbide originated in Germany in the 1920s, and was subsequently produced in countries such as the United States, Austria, Sweden and Japan. China’s cemented carbide industry began in the late 1940s. After more than 70 years of development since the founding of the People’s Republic of China, China has become the country with the largest output of cemented carbide. According to the China Tungsten Industry Association: In 2020, China’s cemented carbide production capacity will be 55,000 tons, and the output will be 41,000 tons, accounting for about 40% of global production.

The high hardness and high wear resistance of cemented carbide enable it to be manufactured into various mining tools, cutting tools, wear-resistant tools, etc. From the perspective of output distribution, cutting tool alloys accounted for the largest proportion, accounting for 45% in 2019; Wear-resistant tool alloys accounted for 27%, mining tool alloys accounted for 25%, and other hard alloys accounted for 3%.


Application of cemented carbide products


Cemented carbide products are generally used as intermediate products and consumables in industrial production, and their demand is affected by the market demand for end consumer goods, so they have a high degree of correlation with the macroeconomy. Widely used in construction machinery, metal cutting machine tools, automobile manufacturing, electronic information, aerospace military industry and other fields, known as “the teeth of industry”.

1. Cemented carbide mining tools


Mining tool alloys are mainly used in tool manufacturing in the fields of energy and mineral mining and infrastructure construction. In recent years, the level of industrialization and urbanization in China has been continuously improved, and infrastructure construction such as construction, transportation, and water conservancy has continued to invest, and the demand for energy and minerals has continued to increase, driving the demand for cemented carbide tools for mining. The rapid development of the mining cemented carbide tools industry further drives the growth of mining tool alloys. According to the National Bureau of Statistics, the operating income of China’s mining industry in the first three quarters of 2021 will be 2.82 trillion yuan.


2. Cemented carbide cutting tools


Cutting tool alloys are mainly used in cemented carbide tools, including milling tools, turning tools and drilling tools. As an important part of machine tools, they are widely used in key fields such as automobile manufacturing, mould processing, construction machinery and aerospace. In 2019, the market size of China’s cemented carbide-cutting tools was 21.2 billion yuan.

3. Cemented carbide wear-resistant tools


Wear-resistant tool alloys are mainly used in tools or products in various wear-resistant fields, including moulds, wear-resistant parts, etc. The mould mainly realizes the processing of the shape of the article through the change of the physical state of the moulded material. Most industrial product parts are made by mould moulding. In 2020, China’s mould output will be 23.3421 million sets.

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