Inconel 718 disc MTC

2020 Superalloy Industry In-Depth Report
(HY Marketing -Initial Public Offerings Research Center)

superalloy Introduction:

In 2018, the global superalloy market was worth US$12.9 billion, a year-on-year increase of 5.7%. It is estimated that the global superalloy market will reach US$17.3 billion in 2024. HY-Industry believes that the aerospace sector is the main source of demand for superalloys. China’s national defense construction is currently in a critical period, and the demand for superalloys will far exceed the overall growth rate of the global market.

1. Introduction to superalloys: high-temperature resistant metal materials, China’s national policy strongly supports

1.1 High-end metal structural materials, strong resistance to high temperature and corrosion

  • Superalloy refers to a type of metal material based on iron, nickel, and cobalt that can work for a long time at a high temperature above 600°C and a certain stress. Superalloys have high high temperature strength, good oxidation and corrosion resistance, good fatigue performance, fracture toughness and other comprehensive properties. The biggest characteristic of superalloys is not that their absolute melting point is very high, but that they still have good characteristics at high temperatures.

  • Superalloys are high-end metal structural materials. The goal of localization of superalloys is to replace high-end materials from Europe and the United States in related application fields. In the “Twelfth Five-Year Development Plan for the New Material Industry” released in 2012, high-end metal structural materials including superalloys were listed as one of the six key development areas of the new material industry.

  • In the follow-up, a series of policies were issued to support the R&D and production of superalloys. Among them, “Made in China 2025” proposed to vigorously promote the development of the new material industry, focusing on the development of six new materials including high-end metal structural materials, and clearly striving to use them by 2025. China’s new materials industry has entered the ranks of world-class powers.

  • High temperature alloys have the characteristics of high temperature resistance and corrosion resistance. In a high-temperature environment, the material will accelerate degradation. During use, it is easy to cause unstable organization, deformation and crack growth under the action of temperature and stress, and oxidation and corrosion of the surface of the material. The high temperature resistance and resistance of high-temperature alloys Corrosion and other properties mainly depend on its chemical composition and organizational structure.

  • Inconel 718 barTake GH4169 (INCONEL 718) nickel-based deformed superalloy as an example. The matrix of GH4169 (INCONEL 718) is Ni-Gr solid solution with a mass fraction of Ni above 50% and can withstand a high temperature of about 650℃. It is similar to the American brand Inconel718. γ matrix phase, δ phase, carbide and strengthening phase γ’and γ″ phase composition. The chemical elements and matrix structure of GH4169 (INCONEL 718) alloy show its strong mechanical properties, and the yield strength and tensile strength are both better than 45 Steel is several times more plastic than 45 steel. The stable lattice structure and a large number of strengthening factors construct its excellent mechanical properties.

  • In addition to the main metal components, superalloys also have requirements for trace elements. Also taking GH4169 (INCONEL 718) nickel-based deformed superalloy as an example, the requirements for impurity elements such as B, Mg, Mn, Si, P, S, Cu, Ca, Bi, Sn, Pb, Ag, Se are very strict.

    The following is the test report of GH4169 (INCONEL 718):Inconel 718 disc MTC

  • High temperature alloy processing is difficult. The machined surface integrity of the material plays a very important role in the performance of the performance, and the superalloy micro-strengthening item has high hardness, serious work hardening, and has high shear stress and low thermal conductivity, cutting force and cutting temperature in the cutting area Due to its high characteristics, problems such as low surface quality and severe tool damage often occur during processing.

1.2 Classification of superalloys

1.2.1 Classification by base element

According to the matrix elements, superalloys can be divided into iron-based superalloys (accounting for 14.3%), nickel-based superalloys (accounting for 80%) and cobalt-based superalloys (accounting for 5.7%).

  1. Iron-based superalloy can also be called heat-resistant alloy steel. The matrix of iron-based superalloys is Fe element, with a small amount of Ni, Cr and other alloying elements added. According to its normalizing requirements, it can be divided into martensite, austenite, pearlite, ferritic heat-resistant steel, etc.

  2. HASTELLOY C-276 boltsNickel-based superalloys contain more than half of nickel, which is suitable for working conditions above 600°C. The solid solution and aging processing process can greatly improve the creep resistance and compressive yield strength. Judging from the current application situation, under high temperature working conditions, the scope of using nickel-based superalloys exceeds the other two types of superalloys. At the same time, nickel-based superalloys are also the largest superalloy in China. Most of the turbine blades and combustion of turbine engines Chambers and even turbochargers use nickel-based alloys as preparation materials.

  3. Cobalt-based superalloys are based on cobalt, and the cobalt content is about 60%. At the same time, the alloy needs to add elements such as Cr and Ni to improve the heat resistance of the superalloy, but the output of cobalt resources is relatively small, and the processing is more difficult. It is usually only used for high temperature conditions (600-1000℃) and high temperature under extreme complex stress for a long time. Parts and components, such as working blades of aero engines, turbine discs, hot end parts of combustion chambers and aerospace engines.Cobalt casting welding wire-2

1.2.2 Classification by preparation process

  • According to the preparation process, it is divided into deformed superalloys (70%), cast superalloys (including equiaxed superalloys, directionally solidified columnar superalloys, single crystal superalloys, accounting for 20%) and new superalloys (powder metallurgy superalloys) , Intermetallic compound superalloy, etc.).

  • Wrought superalloys are the most used in aero engines. Taking GH4169 (INCONEL 718) alloy as an example, it is currently the most widely used main high-temperature alloy variety. Deformed high-temperature synthesis can be used to prepare main parts in the combustion chamber and turbine disk of aero engines. As other alloy products become more mature , The use of wrought superalloys may gradually decrease, but it will still be dominant in the next few decades.

  • Casting superalloys can be divided into the following three categories according to the use temperature. The first category: the equiaxed crystal casting superalloys used at -253-650℃ have good comprehensive properties in a wide range of temperatures, especially at low temperatures that can maintain strength and plasticity without decreasing. The second category: Equiaxed crystal casting superalloys used at 650-950°C have high mechanical properties and thermal corrosion resistance at high temperatures. The third category: Directionally solidified columnar and single crystal superalloys used at 950-1100°C, which have excellent comprehensive performance, oxidation resistance and thermal corrosion resistance within this temperature range.

  • alloy powder-bPowder metallurgy superalloys use atomized superalloy powders, which are formed by hot isostatic pressing or hot isostatic pressing, and then forged to produce high-temperature alloy powder products. Because the powder particles are small and the cooling speed is fast, it has the characteristics of uniform composition, no macro-segregation, fine crystal grains, good thermal processing performance, and high metal utilization. The yield strength and fatigue performance of the alloy are greatly improved. Powder metallurgy superalloys can meet the requirements of engines with higher stress levels, and are the materials of choice for high-temperature components such as turbine discs, compressor discs and turbine baffles with high thrust-to-weight ratio. Powder preparation is the most important link in production. The quality of the powder directly affects the performance of the parts. It mainly uses argon atomization (AA), rotating electrode (PREP) and hydrogen dissolved atomization (SHA) processes. Russia and China use PREP technology. The United States Other countries adopt AA process.

  • Intermetallic compound is a new type of light specific gravity high temperature material. At present, the basic research and development and application research of intermetallic compounds have been mature, especially in the preparation and processing technology, toughening and strengthening, mechanical properties and application research of Ti-Al, Ni-Al and Fe-Al materials. Notable achievements. Ti3Al-based alloys (TAC-1), TiAl-based alloys (TAC-2) and Ti2AlNb-based alloys have low density (3.8~5.8g/cm3), high temperature, high strength, high stiffness, and excellent oxidation and creep resistance. Advantages, it can reduce the weight of structural parts by 35-50%. Ni3Al-based alloy, MX-246 has good corrosion resistance, wear resistance and cavitation resistance, showing an excellent application prospect. Fe3Al-based alloy has good oxidation resistance and corrosion resistance, high strength at medium temperature (less than 600°C), and low cost. It is a new material that can partially replace stainless steel.

1.2.3 Classified by strengthening method

  • According to the strengthening method, it is divided into solid solution strengthening type, aging strengthening type, oxide dispersion strengthening type and grain boundary strengthening type.

  • In solid solution strengthening superalloys, some alloying elements are added to the base superalloy to form a single-phase austenite structure. The solute atoms deform the matrix lattice of the solid solution and increase the sliding resistance in the solid solution for strengthening. Solute atoms can reduce the stacking fault energy of the alloy system, increase the tendency of dislocation decomposition, and make it difficult to carry out cross-slip, achieving the purpose of strengthening the superalloy.

  • Aging precipitation strengthening superalloy is a heat treatment process in which alloy workpieces are solid-solution treated and cold plastically deformed and placed at high temperature or room temperature to maintain their performance. For example, GH4169 (INCONEL 718) alloy has a maximum yield strength of 1000 MPa at 650°C, and the alloy temperature for making blades can reach 950°C.

  • The oxide dispersion strengthened superalloy adopts a unique mechanical alloying (MA) process, and the super stable oxide dispersion strengthened phase is uniformly dispersed in the alloy matrix at high temperature to form a special superalloy. Its alloy strength can be maintained close to the melting point of the alloy itself, and has excellent high temperature creep, high temperature oxidation resistance, carbon and sulfur corrosion resistance.

  • At present, there are three main ODS alloys that have been commercialized, including: MA956 alloy can be used at a temperature of 1350°C in an oxidizing atmosphere, ranking first in the oxidation resistance, carbon and sulfur corrosion resistance of superalloys, and can be used as aero engine combustion chamber lining; The MA754 alloy can be used in an oxidizing atmosphere at a temperature of 1250°C and maintains high temperature strength and resistance to alkali glass corrosion. It has been used to make aero-engine guide gear rings and guide blades; MA6000 alloy has a tensile strength of 222MPa at 1100°C. The yield strength is 192MPa, and the endurance strength is 127MPa at 1100°C and 1000 hours. It can be used for aero engine blades.

  • Grain boundary strengthening superalloys use the barrier effect of grain boundaries on the movement of dislocations. The smaller the grains, the more grain boundaries, the greater the barrier, and the better the strengthening effect. The grain boundary can limit the plastic deformation within a certain range and make the plastic deformation uniform. Therefore, the refinement of the grain can improve the plasticity of the steel. Grain boundaries are also an obstacle to crack propagation, so grain refinement can improve toughness. Grain boundary strengthening is the only method that can increase strength without compromising toughness.

1.3 Naming rules for superalloy grades

1.3.1 International brand naming rules

  • International superalloy grades are named according to the manufacturer’s registered trademark.

1.3.2 Chinese brand naming rules

  • Different from the international, Chinese superalloy grades are national unified standards and are expressed by a combination of letters and Arabic numerals. According to special needs, English letters can be added after the grade to indicate a modified alloy of the original alloy, such as a specific process or specific chemical composition.

2. International comparison: China’s research and development system is becoming more mature and is currently in the stage of innovative development

2.1 The development of international superalloy materials started early

  • The development of high-temperature alloys is mainly carried out in Germany, Britain, the United States, Japan, Russia and other countries in the world. The international development system of superalloys presents a major feature. The applicable working temperature range of superalloys is getting higher and higher, from less than 800℃ in the early days to the current working temperature of 1700℃. With the continuous improvement of working temperature, it is new technology and new technology. The continuous iteration of the process, from deformed superalloys, casting superalloys to powder metallurgical superalloys, especially the promotion of directional solidification and other technologies has promoted the continuous improvement of aero-engine performance.

  • In 1939, the British International Nickel Company first developed Nimonic 75, a low-carbon nickel-based metal containing titanium, and then Nimonic 80 alloy containing aluminum and titanium alloy elements came out. In 1942, Nimonic 80A alloy was used as the material for turbine motive blades, which was the earliest application of Ni3 (AL, Ti) reinforced turbine blade materials. Since then, the British International Nickel Company formed the Nimonic series of high-temperature alloy materials by adding different alloying elements to the alloy materials, including Nimonic 80A (B, Zr), Nimonic 90 (cobalt), Nimonic 100 (molybdenum), etc., and improved metallurgical technology. Nimonic 93, 108/109 and 120 alloys have been developed by the method; in terms of single crystal superalloys, Rolls-Royce has developed alloys such as SRR99, SRR2000 and SRR2060, forming the RR series.

  • aero-engineAfter 1941, the United States began to vigorously develop aero engines, and the application of superalloy materials followed. In 1942, Hastelloy B nickel-based alloy was used in two jet engines of General Electric Company. In 1944, the cobalt-based alloy HS23 was developed for the precision casting blades of Westinghouse engines. After 1950, due to the lack of cobalt resources, the United States began to develop nickel-based superalloys and used them to make turbine blades. PW, GE, and Special Metals respectively developed Waspalloy, M-252, and Udimet500 alloys based on these alloys Formed Inconel, Mar-M and Udmit alloy series. After the 1960s, the single-crystal superalloy blades manufactured by the directional solidification process greatly improved the performance of aero-engines. The PWA1480 single-crystal alloy blades developed by PW Company were used in PW2037, PW1130, F100, JT9D-7R4, T400-W Used in engines such as V-402 and V-402, single crystal hollow precision cast blades were put into use in 1982. At present, the single crystal superalloy blade materials in the United States are mainly from PW, GE and Monnon-Muskegon, named after PWA series, Rene-N series and GMSX series respectively.

  • In the former Soviet Union (Russia), superalloys are called heat-resistant alloys. From the mid-1940s to the 1950s, the former Soviet Union developed iron-nickel-based, nickel-based, and cobalt-based heat-resistant alloys on the basis of heat-resistant steel, such as ∋H415, ∋H395, ∋H388, ∋H435, ∋H602, ∋H929, ∋H416 (cobalt-based) and ∋H105 alloy, etc. The composition of nickel-based heat-resistant alloys in the former Soviet Union is characterized by the addition of more tungsten and molybdenum, a certain amount of iron and a small amount of vanadium, while the American alloys commonly use molybdenum and less tungsten. After the 1960s, the former Soviet Union developed ∋H868, ∋H57, ∋Π99, ∋Π220, ∋Π238, ∋H618 and other alloys. The superalloys of the former Soviet Union (Russia) can be divided into ∋H and ∋Π (deformed) alloy series and alloy series with ∗, ∗, ∗Π, ∋∗C (casting and single crystal alloys) as the brand prefix.

  • Major manufacturers of superalloys in the United States, Britain, and Japan:

    The United States is the most important country in the production of superalloys, with an annual production of approximately 50,000 tons, of which 60% is used for civilian use. In the military field, aero-engine manufacturers General Electric (GE) and Pratt & Whitney (PW) also produce superalloys; in the civilian field, US companies engaged in the R&D and production of superalloy materials include Special Metals Corporation and Cabot Company, Haynes-State Corporation, etc.

  • The British International Nickel Corporation produced the world’s first nickel-based metal superalloy. In addition, British aeroengine company Rolls-Royce has also developed directional solidification alloys and single crystal alloys.

    Major Japanese high-temperature alloy manufacturers are JFE Corporation, Nippon Steel, Ishikawajima Harima Heavy Industries and Kobe Steel. Japanese companies participate in the development of aeroengines, leading the world in single crystal alloys. Among them, NIMS and IHI use the fourth-generation Ni-based single crystal superalloy tms-138 to conduct high-temperature endurance tests on supersonic commercial airliners, and successfully reach 1,650 degrees turbine The highest temperature in the world.

2.2 China has formed a unique R&D system for superalloys

  • China’s superalloy has undergone the development process of imitation, imitation and creation combined with original creation, forming a unique superalloy system in China. There are more than 200 kinds of superalloys developed in China, and 177 of them were included in the national standard in 2005, forming the basis of the superalloy system. Before 1980, China’s superalloys had formed its own basic system, which is now more complete and systematic.

  • Different from international manufacturers’ respective system standards, China’s superalloys have formed a unified national standard, which builds a complete system in the order of alloy forming methods, matrix elements and strengthening methods. Among them, alloy forming methods include deformed superalloys, cast superalloys (including equiaxed crystal casting superalloys, directionally solidified columnar superalloys and single crystal superalloys), welding superalloy wires, powder metallurgy superalloys, and dispersion strengthened superalloys It is divided into high temperature materials with intermetallic compounds; under these different alloy series, it is divided into iron-based, nickel-based, cobalt-based and chromium-based alloys; under the same matrix, it is divided into solid solution strengthening and aging strengthening types.

  • The development of superalloys in China can be divided into three stages:

  1. From 1956 to the early 1970s was the initial stage of China’s development of superalloys. Under the guidance of Soviet experts, GH3030 superalloy was manufactured. After that, in order to produce superalloy materials for fighter engines, GH4033, GH4037 (AMS5829), GH4049 (2.4636 Nimonic 115), GH2036, GH3030 were developed and produced by imitating the former Soviet Union superalloy. , GH3039, GH3044, K401, K403 and K406 and other high-temperature alloys. At the same time, in response to China’s lack of Ni and Cr resources, iron-nickel-based high-temperature alloys were developed to replace the large amounts of GH4033 and GH4037.

  2. From the mid-1970s to the mid-1990s, China’s high-temperature alloy manufacturing process was in the improving stage. Based on the self-developed series of high-temperature alloy materials in the early stage, by adding large-scale vacuum smelting equipment, fast forging machines, precision forging machines, etc. and advanced testing equipment, the production process is further improved, and the quality management system and stricter quality are established. The management procedures have not only successfully developed a series of new models of deformed alloys and casting alloys, but more importantly, achieved significant breakthroughs in China’s superalloy production technology and product quality control.

  3. From the mid-1990s to the present, it has been the innovative development stage of China’s superalloys. With the development and production of new aero-engines, further requirements have been put forward for superalloy materials, and major breakthroughs have been achieved in the production process of superalloys. At this stage, the powder superalloy production line for the rotating electrode powder process was established and perfected, and the powder turbine disk materials FGH4095 and FGH4096 were developed; the mechanical alloying technology was used to develop the oxide dispersion strengthened superalloys MGH4754 and FGH2756; the first Generation and second generation single crystal superalloys DD402, DD408, DD406, etc., new directionally solidified columnar alloys DZ4125, DZ4125L, DZ604M, DZ417G, low expansion coefficient alloys GH2907 (GH907 Incoloy 907), GH2909 (GH909, incoloy 909) and resistant Hot corrosion, malleable and castable high Cr alloy GH4648, etc.

  • The main enterprises engaged in the research and production of superalloys in China are divided into two categories, forming a pattern of dislocation competition: the first category is special steel enterprises, mainly Fushun Special Steel, Baosteel Special Steel, and Great Wall Special Steel. Alloy plates, bars and forgings, these products have the largest amount and simple structure; the other is the transformation of scientific research institutes, mainly HY-Industry, Beijing Aviation Research Institute of China Aviation Development (Beijing Aviation Development Institute), Chinese Academy of Sciences Metal Research (Zhongke Sannai), mainly produces high-end products with small batches and complex structures.

2.3 There is still much room for improvement in China’s superalloy products

  • Beginning in 1956, China’s superalloy research and production have experienced more than 60 years of development, and a relatively complete superalloy system has now been formed. However, there are still gaps in many aspects with the US, UK, Japan and other countries. Mainly reflected in the following aspects:

  • First, the cost of superalloy products is relatively high, the production process of superalloy parts is complicated and backward, and the yield rate is low.

    Second, the development of superalloys in China has always been based on military products. The focus of research and development is on military applications, and the service life and other aspects do not meet the requirements of long maintenance periods required by civil aviation engines.

    Third, in some high-end fields, such as single crystal blades, China’s technological level lags behind the international advanced level, and it is impossible to develop mature products that reach the international mainstream level.

3. China is the main growth point of the global superalloy market, and downstream demand may be concentrated

3.1 The global superalloy market is developing steadily, and China is the main source of demand growth in the future

  • Global superalloy market has grown steadily in recent years. According to data from the Prospective Industry Research Institute, the global superalloy market totaled US$75.8 billion from 2012 to 2018, with an average annual market size of approximately US$10.8 billion; in 2018, the global superalloy market was US$12.163 billion, an increase of 4.8% year-on-year It is estimated that the global superalloy market will reach $17.3 billion in 2024. HY-Industry believes that the aerospace sector is the main source of demand for superalloys. China’s national defense construction is currently in a critical period, and the demand for superalloys will far exceed the overall growth rate of the global market.

  • High-temperature alloy industry chain: upstream of the high-temperature alloy industry chain, according to the material preparation process, it is mainly divided into deformed superalloys, cast superalloys and powdered superalloys. Due to the difference in material properties of superalloys with different preparation processes, their manufacturing and processing methods It is also different from the working application environment. Take the high temperature alloy used in aero engines as an example. The deformed high temperature alloy is mainly forged and cast. The high temperature alloy is mainly used for casting. The powder high temperature alloy is mainly used for sintering and forming, and then processed by machining and heat treatment. , To form products in the final form required for downstream applications.

  • From the distribution of downstream applications, aerospace and energy application scenarios are the main sources of demand. At present, the aerospace field is the largest application scenario for superalloys, with a demand share of 55%, followed by gas turbines and petrochemical fields and other energy reference scenarios accounting for 33%, and the two together account for the overall demand scale Around 88%; demand in the industrial and automotive sectors accounted for 7% and 3% respectively.

  • Superalloy materials were initially mainly used in the aerospace field, but due to their good high temperature resistance and corrosion resistance, they are widely used in shipbuilding, electric power, metallurgy, automobile, nuclear industry and other industrial fields. The continuous development of the downstream application scenarios and market demand are also in a trend of continuous expansion.

  • Aerospace: In modern aeroengines, the amount of superalloy materials accounts for about 40%-60% of the total mass of the engine. They are mainly used in the four hot-end parts of the combustion chamber, guide vanes, turbine blades and turbine discs, as well as the engine Cases, ring parts, tail nozzles and other parts with high working temperature. Aerospace engines are similar to aeroengines, but the aerospace engine materials not only have higher requirements for performance under high temperature and high pressure, but also require stable operation under low temperature and high temperature gradient environments. Taking liquid engines as an example, superalloy materials are mainly used in thrust chambers as injector panels, turbo pump elbows, and graphite rudder fasteners.

    Various types of gas turbines (ships, electric power, etc.): Similar to aero engines, superalloys are also widely used in hot-end components in gas turbines for ships and electric power.

  • Petrochemical industry: In the deep well exploitation of oil and natural gas, the drilling tools are in a high-temperature acidic environment. At the same time, due to the presence of carbon dioxide, sulfur dioxide and sediment, corrosion-resistant and wear-resistant high-temperature alloys must be used. At the same time, high-temperature alloys are widely used in various petrochemical fields. Valves, liquid diverters, etc.

    Nuclear industry: Various metal parts in the nuclear industry need to withstand high temperatures during operation and require higher creep strength. Superalloys can meet their requirements and are mainly used in fuel element cladding materials, structural materials and fuel rod positioning Grid frame, high temperature gas furnace heat exchanger, etc.

    Automobile field: High-temperature alloys are mainly used in the turbine impellers of automobile turbochargers. At the same time, the valve seats, inserts, intake valves, sealing springs, spark plugs, bolts and other parts of automobile internal combustion engines can also be made of high-temperature alloy materials.

  • Other fields: high-temperature alloys are also widely used in glass manufacturing, metallurgy, medical equipment and other fields, such as flame crucible tongs for the production of glass wool, roller pipe drawing machine parts for the production of flat glass, forehearths and gates of glass furnaces, etc. ; Blocks for heating furnaces in rolling mills, continuous wire rolling guides, etc.; artificial joints in the field of medical equipment, etc.

3.2 China’s demand for superalloys is broad, and the short-term may enter a period of concentrated heavy volume

  • Current demand for superalloy materials in major fields in China is about 45,000 tons, and the market size is about ¥12.7 billion. Among them, 6,000 tons of military aircraft engines, 3,800 tons of civil aviation engines, 3,125 tons of gas turbines for ships, 25,000 tons of power generation and natural gas transportation, 4,900 tons of automobiles, and 1,800 tons of nuclear power construction. According to our forecasts on the future development of various demand fields, in the next 20 years, the total demand for superalloys in the above fields will be about 1.07 million tons, and the market size will be about ¥303 billion.

3.2.1 Military aviation engines will usher in the demand for replacement

3.2.1.1 Aeroengine is the main application field of superalloys

  • High-temperature alloy materials were initially mainly used in the aerospace field. Because of their excellent high temperature resistance and corrosion resistance, they have gradually been applied to power, shipbuilding, automotive, metallurgy, glass manufacturing, atomic energy and other industrial fields, thus greatly expanding the high temperature Application areas of alloy materials.

  • turbine bladeDemand for “two machines” accounts for 85% of the demand for superalloys. At present, the main application field of superalloys is aerospace engines, which account for 55% of the overall downstream demand, and another 35% are used in gas turbines. In modern aeroengines, the amount of superalloy materials accounts for 40%-60% of the total mass of the engine. They are mainly used in the four hot-end components, combustion chambers, guides, turbine blades and turbine discs. In addition, they are also used in the casing, Rings, afterburners and tail nozzles.

  • According to different operating temperatures, aeroengines are divided into two parts, the cold end and the hot end, based on the front and back of the combustion chamber. Increasing the energy of the ejected gas is the most important way to increase the working efficiency of the engine. It requires an increase in the working temperature of the engine. Therefore, higher requirements are placed on the materials of the hot end components, especially the turbine components. The working temperature of the hot end parts of the aero-engine exceeds 1000 degrees Celsius, and the turbine parts are subjected to relatively large mechanical loads during high-speed rotation. Therefore, high-temperature alloy materials are required to maintain excellent mechanical properties at high temperatures.

3.2.1.2 China’s defense budget continues to increase, and the proportion of equipment construction expenditure is expected to increase

  • After nearly 10 years of rapid growth in China’s defense budget, the growth rate began to show a downward trend in 2014. In 2017, the year-on-year growth rate of 7% was the lowest in the past decade. In 2018, the growth rate of China’s defense budget rebounded for the first time in recent years, and the year-on-year growth rate rose to 8.1%. In 2019, the central government’s general public budget was ¥3.539.5 billion , an increase of 6.5%, and the national defense expenditure budget was ¥1.189 trillion (approximately US$177.61 billion), an increase of about 7.5% year-on-year. The total defense budget of China has maintained a trend of increasing year by year. Although the growth rate has fallen from 2018, the overall change in the annual growth rate has maintained a steady upward trend.

  • Continuous increase in China’s defense budget is an objective demand for the development of the defense industry. China’s national defense construction must develop in harmony with economic construction and be in line with China’s national security and development interests. It is a common practice in all countries to adjust the size of China’s defense budget according to national defense needs and the level of national economic development. Regardless of the proportion of China’s defense budget to China’s GDP and national fiscal expenditure, or the per capita amount, China’s defense investment level is lower than that of major countries in the world.

  • In recent years, China has moderately increased its national defense investment, and a considerable part of it is to make up for the inadequate investment in the past. It is mainly used to update armed equipment, improve the living conditions of military personnel, and the training and living conditions of grassroots troops. At present, the proportion of equipment expenses is increasing, and training maintenance expenses are also expected to continue to increase. As the military becomes more sophisticated, the proportion of equipment expenses and training maintenance expenses related to the procurement of weapons and equipment still has room for improvement.

  • There is still a big gap between China’s defense expenditure and its own construction needs, and it will maintain long-term stable growth in the future. “Ensure that mechanization will be basically achieved by 2020, major progress will be made in informatization construction, and strategic capabilities will be greatly improved; we will strive to achieve basic national defense and military modernization by 2035; and build the People’s Army into a world-class military by the middle of this century” is 19 The development plan of our army proposed in the big report is clear. “China’s National Defense in the New Era” pointed out that China is the only major country in the world that has not yet achieved complete reunification. It is one of the countries with the most complicated surrounding security situation in the world. It faces severe challenges in safeguarding national sovereignty, territorial integrity, and maritime rights and interests.

  • Chinese military is in the stage of transition to informatization, and the task of conforming to the development trend of the world’s new military revolution and advancing the military revolution with Chinese characteristics is arduous and onerous. Compared with the guarantee requirements for safeguarding national sovereignty, security, and development interests, China’s defense expenditure is still far from the guarantee requirements for fulfilling the international responsibilities of a major country, and compared with the guarantee requirements for its own construction and development.

  • Judging from the structure of military expenditures in recent years, the proportion of equipment expenditures is increasing, and training maintenance costs are expected to continue to increase. We estimate that with the overall size of the army shrinking by 300,000 to 2 million and the army becoming more sophisticated, there is still room for improvement in the proportion of equipment expenses and training maintenance expenses related to the procurement of weapons and equipment.

  • It is expected that China’s defense budget in 2020 will achieve steady and rapid growth. With the continuous deepening of actual combat training, the military’s demand for the procurement and maintenance of weapons and equipment will continue to expand, objectively putting forward rigid requirements for the growth of China’s defense budget.

  • As a part of government fiscal expenditure, defense expenditure is closely related to the national economic growth rate. After more than 30 years of rapid growth, the growth rate of the Chinese economy will gradually slow down, and the GDP growth rate has begun to decline year by year, but the growth trend year by year is relatively certain. China’s defense budget accounts for a relatively fixed proportion of GDP, and the steady growth of GDP will surely drive the absolute amount of China’s defense budget to maintain a steady upward trend. In addition, the United States continues to invest heavily in China’s defense budget, which will directly lead to rapid growth in global defense spending.

  • Therefore, HY-Industry believes that under the influence of both the internal factors of increasing military demand and the external factors of the rapid growth of world defense expenditures, China’s defense budget expenditures in the next few years may continue to maintain stable and rapid growth, and the growth rate is expected to be in 2020. Maintained within the range of 7.5%-8.0%.

3.2.1.3 Aviation equipment is the key sequence of China’s national defense construction

  • There is still a significant gap between China’s air combat capability and the world’s first-class level, and there is a strong demand for new models to be installed. According to statistics from worldairforce2019, there are currently 602 second-generation fighters and attack aircraft (J-7, J-8, Q-5) of the Chinese Air Force, and only three generations (J-10, J-11, J-15) 564.

  • From the perspective of the structure of fighter generations, the number of second-generation and third-generation fighters is roughly equal, and about 40% of the second-generation and early third-generation fighters are facing retirement, and new fighters are urgently needed to fill the number of vacancies.

  • Domestically produced fourth-generation fighter J-20 has officially entered service and has the basic conditions to perform combat missions. If the original third-generation fighter is still used with it, the tactical role of the stealth fighter cannot be fully maximized; at the same time, it will face the continuing tension of international The situation is that when performing missions such as alerting, patrolling, and driving away, the air power dominated by three-generation aircraft has no obvious advantage over neighboring countries.

  • Therefore, HY-Industry believes that the three generations of semi-fighters will become the main force to fill the vacancy of Chinese fighters. In terms of large aircraft, the H-6K will still be the main model of China’s strategic and tactical bombing in a short period of time, while the Y-20 will gradually take on most of the military’s strategic and tactical transportation tasks, and will also be used as a basic modification platform to derive tankers , Early warning aircraft, electronic warfare aircraft and many other modifications.

  • At present, the army aviation force has basically taken shape. China’s self-developed Zhi-20, as the main model for assault transportation and battlefield communications, is expected to equip the army aviation force on an unprecedented scale. With reference to the establishment of the US military, the Chinese Army Air Force has about 2,000 helicopters in the next 20 years. In the short term, there will be 500 helicopters in the next five years.

3.2.1.4 Calculation of market demand for aero-engine superalloys

  • All types of Chinese military aircraft are about to enter the stage of accelerating heavy volume, and the demand for domestically-made aero engines will also rise rapidly.

  • The vigorous promotion of various policies has also prompted China’s aviation industry to enter a period of rapid growth. The establishment of the China Aviation Development Group means the formal establishment of a separation system for China’s aviation industry, and the ultimate goal of aero engine development will no longer be to meet the needs of fighter jets.

  • Aero engine will become an independent military product for R&D and production. As the leading product of military aircraft, the current industrial position of aero engines is equal to that of complete aircraft. The research and development of aero-engines will have the ability to independently control the investment of resources and the direction of research and development. The pre-research work of various models will be carried out on a large scale.

  • At the same time, the shackles of aero-engine research and development funds have been basically eliminated. The two aircraft special projects have brought hundreds of billions of special funds for engines. If calculated with an average research and development expenditure of 3 billion US dollars, the special funds allocated this time are enough to maintain 4 to 5 aero engines Research and development.

  • With high-intensity financial support, China’s aero engine research and development is expected to make breakthrough progress in the next few years. China is now aware of the importance of aero engines to the development of equipment and the relatively backward status of China’s aero engine industry. Aero engines have been upgraded to the level of strategic equipment, and other forms of financial support policies are expected to continue to be introduced.

  • With reference to our forecast of the future demand for military aircraft, assuming that the equipment ratio of China’s aero-engines is 1.5, the number of times the stock fighters need to be replaced with new engines every 5 years is an average of 1 time, assuming that all old fighters need to be replaced once within 5 years.

  • Based on this calculation, the demand for fighter and trainer engines in the next five years will be 4374, the demand for transport aircraft engines will be 1200, and the demand for helicopter engines will be 3,000; the demand for fighter and trainer aircraft will be 30246 and the demand for transport aircraft engines will be 12,000 in the next 20 years. The helicopter engine demand is 22,500 units.

  • Taking the F100 series engine as an example, the total mass of a single engine is about 1800kg. According to the calculation of the mass proportion of superalloy materials and the yield rate of 20%, the total need of superalloy materials is about 4.5 tons; taking the D30 engine as an example, a single engine The total mass is about 2700kg. According to the calculation of 50% of the mass of superalloy materials and 20% of the yield rate, a total of about 6.75 tons of superalloy materials are required. Taking the T700 turboshaft engine as an example, the total mass of a single engine is about 250kg. Calculating that the quality of alloy materials accounts for 50% and the yield rate is 20%, a total of about 0.625 tons of high-temperature alloy materials are required.

  • According to our estimation of the demand for aero engines in the next 5-20 years, China’s total demand for superalloys for aero engines in the next 5 years is about 30,000 tons, an average of about 6,000 tons per year; the total demand for the next 20 years is about 230,000 tons. The annual average is about 11,500 tons. Based on the unit price of ¥300,000 per ton of superalloy, the market size of aero-engine superalloys in the next 5 years will be ¥8.897 billion, and the market size in the next 20 years will be ¥69.351 billion.

3.2.2 Demand for civil aviation engines will steadily increase

  • The strong economy and passenger demand are the main driving forces of civil aviation. Europe and the United States belong to the mature aviation market. The future global aviation market mainly depends on the Asia-Pacific region. As the economic leader in the Asia-Pacific region, China’s strong economy has strongly promoted the development of civil aviation.

  • COMAC’s “Civil Aircraft Market Forecast Annual Report 2019-2038” pointed out that the Chinese aviation market will receive 9,205 passenger aircraft with more than 50 seats in the next 20 years, with a market value of approximately US$1.4 trillion (based on the 2018 catalog price), equivalent to The RMB is about ¥10 trillion . Among them, 958 turbofan feeder airliners above the 50-seat class were delivered; 6,119 single-aisle jet airliners above the 120-seat class were delivered; 2,128 dual-aisle jet airliners above the 250-seat class were delivered.

  • According to the number of engines required for civil aviation passenger aircraft of different seat classes and the corresponding engine quality, assuming that all civil aviation aircrafts will be replaced once in the next 20 years, the quality of superalloy materials accounts for 50% and the yield rate is 20%. In the next 20 years, civil aviation aircraft in China The total amount of superalloy required for the engine is about 220,000 tons. Based on the unit price of ¥300,000 per ton of superalloy, the overall market size in the next 20 years will be ¥66.145 billion.

  • According to the calculation of the average annual growth rate of the civil aviation fleet of 10%, the current demand for superalloys for civil aviation engines is about 3,800 tons, and the market size is about ¥1.15 billion.

3.2.3 Gas turbine demand multi-dimensional force

  • The gas turbine device is a rotary heat engine using air and gas as the medium, and the structure is the same as that of an aero engine. The gas turbine is mainly composed of three components: compressor, combustion chamber and turbine. After the unit is successfully started, the compressor continuously sucks in the atmosphere from the outside atmosphere and pressurizes it. The fuel injected into the combustion chamber is mixed with air and then ignited and burned. High temperature and high pressure gas Expansion work in the turbine, about 2/3 is used to drive the compressor, and the rest is driven by the transmission shaft of the unit to drive various external loads, such as generators, compressors, propellers, pumps, etc. The gas turbine can be regarded as composed of two parts: a gas generator and a power turbine. The gas generator turbine used to drive the compressor and accessories is used to drive the reducer, propellers or other external loads—the one designed for power output is called Power turbine.

  • At present, gas turbines are widely used in power generation, ship power, locomotive power, pipeline boosting and other fields. One-fifth of the world’s power generation comes from gas turbines. The cycle thermal efficiency of gas turbines can reach 60%, far exceeding the supercritical coal used in general thermal power stations. 40% of the system. In terms of ship power, the assembly rate of European and American naval gas turbines is above 50%.

  • The combustion chamber, connecting ducts, guide blades, working blades and turbine discs of the hot end parts of industrial gas turbines are mostly made of high-temperature alloy materials, which is similar to that of aero engines.

3.2.3.1 Measurement of the market size of superalloys for marine gas turbines

  • aeroengine-2Gas turbines have significant advantages in the field of marine power. In terms of the choice of warship power schemes, the main competitors of gas turbines are marine diesel engines and steam turbines. Because gas turbines have the three inherent advantages of high power density, fast starting speed, and low noise and low frequency components, old navies such as the US Navy, the British Navy and Japan The main surface warships such as the Maritime Self-Defense Force have been converted into gas turbines.

  • Chinese Navy has undergone nearly 20 years of modernization, and now it has initially formed a modern maritime force, and the number of maritime vessels has reached the world-class level.

  • Naval equipment is following the development of two major trends, from quantity to quality, from near to far, that is, to eliminate backward ships, to equip modern large-tonnage destroyers and frigates in batches, and to rapidly establish modern ocean-going naval combat forces.

  • At present, the Chinese Navy is at the fourth peak of shipbuilding since the founding of the People’s Republic of China. In recent years, the 056 series light frigates and 052 series destroyers have been launched into service in batches, replacing the original 053 frigates and missile boats for offshore defense operations and offshore patrols.

  • With the continuous increase in the number of long-sea trainings for the Liaoning carrier fleet, various types of supporting warships in the aircraft carrier fleet have begun to serve gradually. The 901 large integrated supply ship responsible for aircraft carrier replenishment has officially entered service, and the 055 large guided missile destroyer has also been in service in 18 years. The sea trial started in September and the ship’s hull has been painted. In April 2019, it participated in the military parade for the 70th anniversary of the founding of the Navy.

  • We predict that the Chinese Navy will build an ocean-going naval force around 10 aircraft carriers in the next 20 years. The total number of ships to be built is 360. The demand for gas turbine renewal is not considered for the time being.

  • Only the number of newly launched ships equipped with gas turbines will be 780. Refer to LM2500 and GT25000 gas turbine weighs about 25 tons. Assuming that 50% of the weight is made of high-temperature alloy materials, the yield rate is 20%. A total of 49,000 tons of high-temperature alloy materials are required.Based on¥300,000 per ton, the total market space is about¥14.625 billion.

  • In 2019, China’s newly launched warships totaled 200,000 tons, including 7 Type 052D destroyers, 2 Type 055 destroyers, 1 Type 071 integrated landing ship, 1 Type 075 amphibious assault ship, 12 Type 056A light frigates, and 1 Type 901 integrated supply ship, gas turbine requires a total of 3,125 tons of superalloy materials, and the market scale is about ¥938 million

3.2.3.2 Calculation of the market size of gas turbine superalloys for power generation and pipelines

  • Cost of natural gas power generation is high and its share in China is low. Gas-fired power generation accounts for half of the global natural gas produced, and about 50% of natural gas is used for power generation every year. Correspondingly, the installed natural gas power generation capacity of major countries also accounted for a large proportion of the total installed capacity, of which the United States is 39.3%, Japan is 29%, the United Kingdom is 34.1%, South Korea is 26.6%, and China is only about 3%. . Natural gas power generation is cleaner and more environmentally friendly than coal power generation, but the cost of natural gas power generation is higher.

  • Price of natural gas will fall in the mid to long term, and the biggest disadvantage of natural gas power generation is expected to be gradually eliminated. With the gradual increase in the supply of imported and domestic natural gas, the problem of high gas prices in China is gradually improving. Take the Sino-Russian East Route Natural Gas Pipeline as an example. The line was ventilated and put into production in early December 2019. According to the plan, the total length of the project’s pipeline in China is 5,111 kilometers, passing through Heilongjiang, Jilin, Inner Mongolia, Liaoning, Hebei, Tianjin, Shandong, Nine provinces and cities including Jiangsu and Shanghai are the first cross-border strategic route for onshore natural gas in Northeast China. After the pipeline runs at full load, the annual gas supply capacity will reach 38 billion cubic meters.

  • In terms of domestically produced gas, China’s domestically produced gas increased by more than 10 billion cubic meters for two consecutive years. According to the “China Natural Gas Development Report”, China’s future development of natural gas in the Sichuan Basin, tight gas development in the Ordos Basin and breakthroughs in the technical bottleneck of land shale gas development, as well as offshore natural gas and unconventional natural gas development, is expected to further reduce the natural gas price center.

  • According to data from the China Electricity Council, as of the end of 2019, the national installed capacity of full-caliber power generation was 2.01 billion kilowatts, a year-on-year increase of 5.8%. Among them, gas power is 90.22 million kilowatts, accounting for 4.49%. In 2019, the nation’s new installed capacity of gas and electricity was 6.29 million kilowatts. According to the calculation of a single gas turbine of 30 MW, a total of 210 gas-electric gas turbines will be required in 2019, the consumption of superalloy materials will be about 13,000 tons, and the market size will be about ¥4 billion.

  • Based on this calculation, assuming an annual new installed capacity of 6 million kilowatts of gas-electricity in the next 20 years, a total of 4,000 gas-electricity gas turbines will be needed in the next 20 years, the consumption of superalloy materials will be about 250,000 tons, and the market size will be about ¥75 billion.

  • Pipeline gas turbines benefited from the construction of the national pipeline network. From 2009 to 2018, China’s natural gas consumption has an average annual compound growth rate of 13.95%, while the average annual compound growth rate of oil and gas pipeline mileage is only 6.55%. The bottleneck of pipeline transportation capacity limits the development of the natural gas industry to a certain extent.

  • According to this, the country proposes to promote the independence of the main pipeline network of large state-owned oil and gas enterprises step by step, and realize the separation of pipeline transmission and sales. In December 2019, the National Pipeline Network Company was established. In the future, China’s pipeline network will usher in a period of major construction.

  • According to the “Medium and Long-term Oil and Gas Pipeline Network Plan” issued by the National Development and Reform Commission and the Energy Administration, the national oil and gas pipeline network will reach 169,000 kilometers by 2020, including 104,000 kilometers of natural gas pipelines; by 2025, the oil and gas pipeline network will reach 240,000 kilometers. , Of which the natural gas pipeline mileage is 16.3 kilometers. As of the end of 2018, China has built and operated long-distance natural gas pipelines with a total mileage of 76,000 kilometers, and 28,000 kilometers will still need to be constructed from 2019 to 2020; we expect that China’s natural gas pipeline construction will reach 150,000 kilometers in the next 20 years.

  • Normally, there is one compressor station in every 100-200 company in the natural gas pipeline, and each compressor station is equipped with 2 gas turbines on average. Based on this calculation, the gas turbine market for natural gas pipelines will require an average of about 12,000 tons of superalloy materials per year from 2019 to 2020, with a market size of about ¥3.5 billion; in the next 20 years, a total of 125,000 tons of superalloy materials will be needed, and the market size will be about ¥37.5 billion.

4.2.4 Potential demand in the automotive and nuclear power fields is strong

4.2.4.1 Space measurement of superalloy market in the automotive sector

  • In the automotive field, superalloy materials are mainly used for automotive exhaust gas turbochargers. The working principle of the turbocharger is that the exhaust gas discharged from the engine impacts the turbine operation, driving the coaxial impeller to rotate at high speed to compress the air and transfer it to the cylinder. Usually, the engine power and torque after the exhaust gas turbocharger is installed. 20%-60% larger. With the increasing number of cars in China and strict emission restrictions, turbocharged car engines have gradually become the mainstream of the market. At present, the turbine wheels used by Chinese turbocharger manufacturers are mostly nickel-based superalloy turbine wheels. In addition, the valve seats, inserts, intake valves, sealing springs, spark plugs, bolts, etc. of internal combustion engines can all be iron-based or nickel-based Base superalloy.

  • Automotive turbochargers have the advantages of reducing noise, reducing harmful gas emissions, and improving power. The international heavy-duty diesel turbocharger assembly rate is 100%, and small and medium-sized diesel engines are also increasing their assembly ratio. Britain, the United States, France, etc. The national assembly ratio has reached about 80%. In contrast, China’s 50% assembly rate still has room for improvement.

  • According to data from the HY-Industry prospectus, at least 2 tons of superalloy materials are required for every 10,000 vehicles. In 2019, China’s automobile production was 25.721 million (including 1.242 million new energy vehicles), requiring about 4,900 tons of superalloy materials. Calculating ¥200,000, the market size is about ¥1 billion.

  • Taking into account the number of automobiles in the future and the increase in China’s assembly rate, assuming an average annual growth rate of 5% in the future, the total demand for superalloy materials in the Chinese automobile market in the next 20 years is about 160,000 tons, and the market size is about ¥32.4 billion.

4.2.4.2 Space calculation of superalloy market in nuclear power field

  • High-temperature alloys used in the nuclear power industry mainly include fuel element cladding materials, structural materials, fuel rod positioning grids, and high-temperature gas furnace heat exchangers.

  • Affected by the Fukushima nuclear accident in 2011, the global installed capacity of nuclear power plants declined, and it resumed growth after 2013. At present, China is the world’s largest nuclear power generating unit under construction and third in operation. According to the International Atomic Energy Agency, the use of nuclear power will maintain growth in the next 20 years, and the increase in installed capacity will mainly come from China, Russia and other countries.

  • According to the “China Nuclear Power Mid- and Long-Term Development Plan”, by 2020, the planned installed capacity of nuclear power in operation across the country will reach 58 million kilowatts, and 30 million kilowatts are under construction.

  • As of the end of 2019, China had 47 operating nuclear power units with a total installed capacity of 48.75112 million kilowatts. It will need to be put into operation by 2020 with 9.25 million kilowatts.

  • According to the HY-Industry prospectus, each 600,000 kilowatt nuclear power plant requires about 600 tons of superalloy materials. Based on this calculation, the 9.25 million kilowatt nuclear power unit that needs to be completed in 2020 will require a total of 9,200 tons of superalloy materials. Taking nuclear power plants into account The construction period is about 5 years, and the average annual demand for superalloy is about 1,800 tons. Based on ¥200,000 per ton, the market size is about ¥370 million. Assuming that the number of nuclear power generating units under construction in the next 20 years will remain at 10, each with an installed capacity of 1 million kilowatts, an average annual demand of about 2,000 tons, and a total market size of about ¥8 billion.

4. Substituting imports: domestic high-temperature alloy manufacturers share industry dividends

4.1 The status quo of China’s superalloy industry: demand exceeds supply, and the competitive landscape is good

  • China’s superalloy market is in short supply. In 2019, the output of superalloy ingots from China’s key high-quality special steel enterprises was approximately 19,100 tons, a year-on-year increase of 32.95%, and the output of steel was approximately 8,500 tons, a year-on-year increase of 50.13%. The supply of China’s superalloy business has seen rapid growth.

  • However, the current overall market demand for superalloys in China is about 40,000 tons, and the problem of short supply is still significant. Due to factors such as high technical barriers, long certification cycles, and large capital requirements, the output of China’s superalloys has grown slowly and the yield rate is low.

  • High-temperature alloy industry has a high threshold and the industry leader has obvious advantages. The field of superalloy materials has a high technical content. At present, the only countries with a complete superalloy system are the United States, Britain, Russia, and China. There are no more than 50 companies in the world that can produce superalloys for aerospace use. Not only is the production process demanding high, long-term capital investment, long certification time and customer stickiness are also one of the manifestations of the high threshold of the industry.

  • Whether it is military or civilian products, has strict audits, a long time span, and time-consuming and laborious, which has built a natural barrier to entry for the industry. Half of superalloys are used in the aerospace field, especially military supplies. Due to strategic security and confidentiality requirements, the leading domestic manufacturers are expected to maintain their leading advantages.

  • High-temperature alloy materials still rely on imports, and the demand for domestic substitution is imminent. At present, China has a small number of high-temperature alloy enterprises, and the overall technological level is still far behind the international leading enterprises. The overall production capacity and actual effective production capacity are relatively small, especially in the high-end aerospace field.

  • According to our data collection on the production capacity of major companies in the industry, the theoretical capacity of 12 companies for superalloys totals about 20,000 tons. According to the data from the general special materials prospectus, it is estimated that 50% of the current market demand for superalloys depends on imports. Taking into account the current high temperature in China The gap between effective alloy production capacity and demand is expected to be more dependent on imports.

  • China’s superalloy industry has formed dislocation competition. The main enterprises engaged in the research and production of superalloys in China are divided into two categories. The first category is special steel enterprises, mainly Fushun Special Steel, Baosteel Special Steel, and Great Wall Special Steel. They mainly produce alloy plates, bars and forgings in larger batches. This type of product has the largest amount of use and simple structure; the other type is the transformation of scientific research institutes, mainly HY-Industry, the Institute of Aviation Materials, and the Institute of Metal Research of the Chinese Academy of Sciences, which mainly produce high-end products with small batches and complex structures.

  • A pattern of dislocation competition has formed among manufacturers. At present, Chinese companies are in a competitive and cooperative relationship with less direct competition. At the same time, there is upstream and downstream cooperation. The main development goals of Steel Research Gona are to achieve technological innovation and expand production capacity to meet market demand.

  • China’s downstream demand for superalloys is dominated by military products. The superalloy industry is mainly used in the aerospace field. Although China lags behind the development of aircraft in the field of military aeroengines as a whole, and partly still relies on imports from Russia, with the gradual delivery of some key models of aeroengines, the reliability of China’s military aeroengines has gradually been resolved, and the military field has gradually Get rid of the situation of relying on imports.

  • In contrast, China started very late in the field of civil aviation engines, and currently there is no relatively mature product.

  • The gap between supply and demand has existed for a long time, and the company’s high gross profit has been maintained for a long time. According to data from China Industry Information Network, in 2018, China’s superalloy market demand was about 37,400 tons, and the output was about 21,800 tons. The supply and demand gap was more than 15,000 tons. Due to the high threshold characteristics of superalloys, the future supply and demand gap in the industry is mainly realized by the expansion of existing enterprises’ production capacity, and the industry competition pattern is stable. Thanks to a good competitive landscape, the company has maintained high gross profit for a long time. Taking Fushun Special Steel as an example, the high-temperature alloy plate has remained above 40% for a long time.

4.2 The localization of the two machines accelerates, and upstream superalloy suppliers directly benefit

  • There have been two major problems in China’s aviation engines for a long time. The first problem is the constraints of the research and development system. Before 2016, the development of aero engines was mainly undertaken by AVIC. The development of engines has long been dependent on the development of fighters. It takes about 10 years to develop a generation of fighters and 15-20 years to develop a generation of aero engines. Time, there is a mismatch in the development cycle, causing the engine to lag behind the development progress of the fighter. The second issue is funding constraints. The international development of a first-generation aero-engine development budget is usually more than 3 billion U.S. dollars,

  • Based on the “Comprehensive High-Performance Engine Technology Plan” implemented by the United States in 1988-2005 and the “Multi-Purpose Plan” implemented in 2002-2017. , “Affordable Advanced Turbine Engine Program” as an example, the two spent a total of 8.7 billion U.S. dollars, and before the special implementation of the two aircraft, China Aviation Development has invested less than 1 billion U.S. dollars in pre-research in 20 years.

  • Since 2015, China has issued a series of special policies, and the problem of lagging development of aero engines and gas turbines is gradually solved, especially the problem of localization of aero engines is expected to be solved gradually. With the further improvement of the localization of aero engines and gas turbines, mature model products will gradually increase in volume, which will directly benefit as a superalloy manufacturer in the upstream of the two-engine industrial chain.

  • The two machines specifically cracked the capital constraints. In the 2015 government work report, “aero engines, gas turbines” replaced “energy-saving and environmental protection, electric vehicles”, and for the first time listed as an independent direction in the seven emerging industries, and the full implementation of aero engines and gas turbines was launched during the “13th Five-Year Plan” period. Major projects, breakthrough the key technologies of the two aircraft, and initially establish basic research, technology and product development and industrial systems for independent innovation of aero engines and gas turbines. The special landing of the two engines is expected to bring about ¥100 billion of special funds for engines.

  • The Hangfa Group was established to break institutional constraints. In August 2016, the China Aviation Engine Group was established. A total of 46 enterprises and institutions engaged in aero engines and related businesses under AVIC were merged into the Aviation Development Group, including 22 engine plants, 621 (Beijing Aviation Materials Research Institute), Three repair shops, etc., with total assets of ¥110 billion. “Flying engine separation” can remove institutional constraints. First, the engine can be manufactured independently of the whole machine, with greater flexibility, and secondly, it can fully integrate aviation resources, strengthen exchanges and mutual assistance, and reduce the cost of repeated construction. Finally, it can be emulated. Overseas giants have achieved multi-industry operations, not only can develop aero engines, but can also use aero engine technology to develop and produce gas turbines for ships, forming industrial synergy.

  • The “US embargo incident” calls for a “Chinese heart.” On February 16, 2020, the “Wall Street Journal” reported that the US government is considering canceling CFM (GE subsidiary) license to export LEAP-1C engines to China. The LEAP-1C engine is the aero engine of choice for China’s C919.

  • If the United States cancels the export of LEAP-1C engines, China’s C919 will face the dilemma of no engine available in the short term, and it will be difficult to find an alternative in a short time, which will greatly affect the delivery schedule of the aircraft. Although the embargo is unlikely due to technical and commercial reasons, this incident has caused a lot of shock in China, causing the people and the government to pay more attention to the aero engine field and call for a mature and usable civil aviation engine.

  • The localization of gas turbines started late and has many restrictions. Heavy-duty gas turbines can be divided into different levels according to the temperature and pressure ratio before the turbine. At present, the E-level, F-level and H/J-level are widely used. Previously, China used the three major electric appliances as the undertaking units to introduce gas turbine technology from Germany, Japan and the United States, and realized the assembly of F-class gas turbines in China, but only limited to the assembly capacity of the whole machine, and did not master the development and design. With the core technology of production, it is unable to independently produce the three major components of compressor, combustion chamber and turbine, and the maintenance and repair links are also controlled by foreign parties.

  • Overseas mergers and acquisitions + independent research and development, speeding up localization. After 2010, Chinese companies have improved their localization level through overseas mergers and acquisitions and independent research and development.

  • Shanghai Electric took a stake in the international gas turbine giant Ansaldo, obtained the right to use the patents of E, F and H-class gas turbines in China, realized the localization of compressors, combustion chambers and turbines, and established a joint venture with Ansaldo The company gradually masters the follow-up maintenance and design links; after the establishment of the “two engines” special project, the state relied on the three major gas turbine plants and the State Power Investment Corporation to set up a joint refueling, choosing independent research and design development.

  • Standard F22 engine, F119 engineThe localization of gas turbines has entered a sprint period. According to the “Several Opinions on Promoting the Innovation and Development of Gas Turbines Relying on Energy Engineering” jointly issued by the National Development and Reform Commission and the Energy Administration, it is required that by 2020, combined with the digestion and absorption of imported technologies, breakthroughs in heavy-duty gas turbine design technology, high-temperature component manufacturing technology, and operation and maintenance technology will solve the problem of gas power generation. As the equipment bottleneck of the project, China has basically formed a complete industrial system for heavy gas turbines.

  • In July 2019, 24 projects including the gas turbine power generation project of Huaneng Nantong Power Plant were included in the first batch of gas turbine innovation development demonstration projects. It is expected that the technical equipment research and project construction will be completed by 2022. Relying on this batch of demonstration projects, China’s gas turbine industry has long been The key core technologies that rely on imports will gradually be localized.

4.3 Import substitution of core components of aero engine

  • In addition to the domestic substitution of superalloy materials by Chinese companies in the upstream of the industrial chain, some Chinese companies have begun to enter the midstream manufacturing link of the industrial chain.

  • The middle link of the industrial chain mainly includes the processing and manufacturing of two-machine high-temperature alloy parts, of which turbine blades and turbine disks are the main ones. Chinese companies have achieved independent research and development in casting equiaxed crystal blades, oriented single crystal blades, and powder metallurgy turbine disks. Domestically produced substitutes and enter the international industrial chain.

  • The localization of the middle reaches of the industrial chain will greatly reduce costs. Take the gas turbine single crystal blade as an example. The price of imported products is about ¥400,000 per piece. After localization, the price of the product is only about ¥100,000, while the number of first-stage turbine blades is 96. This will have a significant impact on the reduction of gas turbine manufacturing costs. As a result, the cost reduction effect will be very obvious considering the cost of blade maintenance and replacement in the later period of the gas turbine.

  • HY-Industry issued a non-public stock offering plan at the end of 2018, and plans to raise ¥950 million, of which ¥665 million will be used for high-temperature alloy precision casting projects to strengthen continuous cooperation with China International customers. At present, HY-Industry has completed directional high-temperature alloys Blade R&D and manufacturing, undertaking the task of R&D and production of a certain type of aeroengine superalloy blades, and supplying single crystal blades to GE.

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