In the "14th Five-Year Plan", China's military equipment accelerated construction, the rapid installation of new types of military aircraft, and the "order of magnitude" incremental construction of missiles have formed a strong demand for upstream materials.
Superposition the independent controllable increment and the increase in the application proportion of high-end high-performance materials in new models of equipment, at present, the upstream materials in the military industry chain show a relatively strong "short supply", and also show higher performance compared to the downstream increase elasticity.
01 | Industry background
One generation of materials, one generation of equipment
Military materials are the material basis for the development of weapons and equipment. Military materials are developing in the direction of "lightweight, high performance, multi-functional, composite, low-cost and intelligent". Titanium alloy, superalloy, carbon fiber "fourteen five" period market demand is expected to maintain a stable and rapid growth, the market space gradually opened.
It is expected that the composite growth rate of market demand for high-end titanium alloy, carbon fiber and superalloy three materials during the "Fourteenth Five-Year Plan" period is 20%, 25% and 16%, assuming that the three prices are 350,000 yuan/ton, 150,000 yuan/ton and 300,000 yuan/ton, respectively. By 2025, the market size of the three materials will exceed 10 billion yuan, 20 billion yuan and 30 billion yuan respectively.
The industrial chain of military materials has been improved
02 | titanium alloy
Material characteristics: excellent performance, widely used in military
Titanium (Ti) is located in the periodic table of the element group IV B, is a silver-white metal, titanium alloy is based on titanium to add aluminum, tin, vanadium, molybdenum, niobium and other elements composed of alloys, due to its excellent physical properties, is widely used in aerospace, ships, Marine engineering, weapons, automobiles, medical, chemical, metallurgy, sports and leisure and other high-end industrial manufacturing. It has a reputation of "third metal", "air metal", "ocean metal" and so on.
Industrial chain: The chain is long and complex
Titanium is abundant on Earth, with a crustal abundance of 0.61%. In the titanium industry chain, the raw materials for industrial applications are mainly ilmenite and rutile, intermediate processed products titanium sponge and titanium dioxide, of which titanium sponge is used to manufacture titanium, used in aerospace, ship weapons and other military fields; Titanium dioxide is mainly used in coatings, plastics and paper and other industries. Due to the complexity and difficulty of titanium smelting technology, only the United States, Russia, Japan and China have mastered the complete titanium industrial production technology.
Industrial chain: upstream raw materials
Rutile is a high-quality raw material for titanium series products, but the natural reserves are less. In terms of reserves, according to the USGS, global ilmenite reserves in 2021 are 700 million tons and rutile reserves are 49 million tons. The TiO2 content of rutile concentrate is generally more than 93%-95%, with high grade and low impurity content, so rutile is a high-quality raw material for titanium dioxide, titanium sponge, titanium tetrachloride and other titanium products.
From the point of view of the country, the distribution of titanium ore is concentrated, although China's reserves are large but high-quality ore is small. The global rutile is mainly concentrated in Australia, India and South Africa, of which Australia ranks first, with 31 million tons of reserves, accounting for 63%; The world's ilmenite is mainly concentrated in China, Australia and India, of which China ranks first, with 23 million tons of reserves, accounting for 33%. Although China's titanium resources are rich in reserves, but mainly ilmenite, TiO2 content is low, and calcium and magnesium impurity content is high, so it is difficult to select and smelt.
Industrial chain: Midstream sponge titanium structural supply and demand imbalance
The basic raw material of high-end titanium is mainly grade 0 sponge titanium. The basic raw material of titanium is sponge titanium. According to the national unified implementation standard of sponge titanium, sponge titanium can be divided into grade 0A, grade 0, grade 1, grade 2, grade 3, grade 4 and grade 5, mainly related to chemical composition and Brinell hardness. The raw material of high-end titanium alloy is mainly grade 0 sponge titanium, and the raw material of civil titanium alloy is mainly grade 1 sponge titanium.
Global sponge titanium overcapacity, China's high-end sponge titanium production capacity is insufficient. Currently, only eight countries - the United States, Russia, China, Japan, Ukraine, Kazakhstan, Saudi Arabia and India - have the production capacity of titanium sponge. According to the USGS, the global titanium sponge production capacity in 2021 is 350,000 tons, but the capacity utilization rate is only 60.0%, of which China's capacity is about 177,000 tons, and the capacity utilization rate is 67.8%. The overall supply of sponge titanium market in China is sufficient, but the gap of high-quality small particle size sponge titanium is large.
At present, China's production growth of high-quality sponge titanium can not meet the explosive growth of downstream demand, and the gap between supply and demand is increasing year by year, mainly through imports from Ukraine and Kazakhstan.
Industrial chain: The downstream high-end titanium production capacity is insufficient (melting and casting difficulties)
Porous titanium sponge needs to be fused into dense titanium ingots to be used in the manufacture of titanium, titanium has high chemical activity, and the melting and casting must be carried out in a vacuum or inert atmosphere. At present, there are two mainstream melting and casting processes in the world: vacuum consumable arc melting (VAR) and cold hearth furnace melting (CHM).
At present, the most widely used in China is the VAR method (Western Superconductor adopts this technology), the advantages are mature process, fast melting speed, the disadvantages are easy segregation, poor composition uniformity and easy to produce defects, so for high quality requirements of titanium alloy ingot, generally through three times VAR melting to reduce defects. CHM method can better solve the problems of low and high density inclusions and composition uniformity. In recent years, some titanium enterprises in China have introduced electron beam cold hearth melting and plasma cold hearth melting and casting furnaces from the United States and Germany. CHM method is also developing rapidly.
Industrial chain: The downstream high-end titanium production capacity is insufficient (difficult to process)
Titanium alloy processing technology is difficult. The thermal conductivity and specific heat of titanium alloy are small, the heat generated during processing is difficult to release through the workpiece, the local temperature rises fast, at high temperatures, on the one hand, resulting in the sharp wear of the tool, on the other hand, it will destroy the surface integrity of the parts, resulting in the geometric accuracy of the parts and the phenomenon of work hardening. Therefore, titanium alloy processing is very difficult, and only six countries in the world, the United States, Russia, Japan, China, Ukraine and Kazakhstan, have mastered the complete titanium processing and manufacturing process. The supply of high-end titanium materials is concentrated in foreign countries, and China's output is large, but mainly in the middle and low end. High-end titanium suppliers are mainly concentrated in Russia, the United States and Japan.
Aviation: Measure the advanced level of aircraft
Because of its low density, high specific strength, good corrosion resistance and low thermal conductivity, titanium alloy is widely used in aircraft structural parts and engines.
At present, the highest speed of the new generation of aircraft is more than 3 times the speed of sound, will make the aircraft and air friction and produce a lot of heat, generally under the speed of sound 2 times when the body can use aluminum alloy, when the flight speed reaches more than 2 times, it must use high temperature resistance and better performance of titanium alloy, when the flight speed exceeds 3 times the speed of sound, the fuselage will use more titanium alloy.
Space: major projects and missile stockpiles
Instead of traditional steel materials, titanium alloy material can greatly reduce the structural weight of aerospace aircraft and improve the corrosion damage resistance of aerospace aircraft structure, which is of great significance to increase the flight range of aerospace aircraft, reduce fuel consumption, extend service life and improve service reliability.
Warship field: natural fit
Because of its high specific strength and excellent corrosion resistance in seawater and ocean atmosphere, titanium alloy has also been widely used in the field of ships. Mainly used in pressure boat body, structural parts, buoyancy system ball, water ship pump body, pipeline and deck accessories, speedboat propeller, propulsion shaft, hydrofoil, whip antenna and so on. At present, the application of titanium alloy in ships is mainly concentrated in some key parts, but with the continuous maturity of the titanium alloy industry and the reduction of costs, the proportion of titanium alloy applications in the future ships will continue to increase.
Market size: High-end titanium material growth space is large, the market size is expected to reach 10 billion
China's consumption is dominated by chemical industry, and the space for high-end titanium materials is broad. China's titanium consumption in 2021 was 127,000 tons, an increase of 35.7%, and the amount of titanium increased rapidly.
Compared with the demand structure of titanium materials, China is mainly in the chemical industry, and the largest demand for titanium materials in the world is the aerospace field, reflecting the low use of high-end titanium materials in China, and the incremental space for high-end titanium materials such as aerospace is still broad in the future.
It is estimated that the total demand for titanium alloy for China's military aircraft in 2022-2026 will be 27,234 tons, with an average annual average of 5,447 tons. The total demand for titanium alloys for civil aircraft is 197,097 tons, with an annual average of 39,419 tons. According to the calculation of 350,000 high-end titanium materials/ton, the annual market size of military aircraft and engines is about 2 billion, and the annual market size of military aircraft and engines is about 10 billion.
Competitive landscape: "Department stores" and "specialty stores"
Military high-end titanium alloys do not directly compete with foreign countries, but there is still a certain gap: such as titanium alloy extruded profiles, die forgings, large titanium alloy broad and thick plates, large titanium alloy castings, titanium alloy rods and wires for aviation fasteners, etc., urgently need to improve product quality in China's titanium industry to fully meet the development needs of national defense military industry for titanium alloys.
From the current point of view, due to the existence of historical status, Baoti is the longest, largest and most complete titanium alloy production enterprise, which can be seen as the "department store" of titanium alloy. The two real controllers of Western Materials and Western Superconductor are both Northwest Non-ferrous Metals Research Institute, so there are restrictions on industry competition, resulting in Western materials are mainly titanium alloy plates and pipes, and Western Superconductor is mainly titanium alloy rod wire. The two have strong competitiveness in their own fields, which can be seen as a "specialty store" of a certain class of titanium alloy.
03 | Superalloy
Material characteristics: It still has good characteristics at high temperature
Superalloy is a kind of advanced structural materials with nickel, iron and cobalt as the matrix, which can withstand a certain stress for a long time at a high temperature above 600℃, and has excellent oxidation resistance and corrosion resistance. Compared with ordinary metals, superalloys have excellent performance in complex working environments: ① high temperature strength; ② Oxidation resistance; ③ thermal corrosion resistance; ④ fatigue resistance; ⑤ fracture toughness; ⑥ Stable internal organization, reliable use. Although the performance is excellent, the preparation of superalloy is difficult, and Europe and the United States also call it super alloy.
Industrial chain: a basically complete industrial chain has been formed
At present, there are more than ten enterprises and research institutes engaged in the research and development and preparation of superalloys in China, and a relatively complete superalloy production system has been formed. The superalloy industry chain consists of upstream raw materials and equipment suppliers, midstream superalloy materials and products manufacturers, and downstream application terminals.
Aerospace: largest application area
At present, superalloys are mainly used in the engine field, including aviation engines, aerospace rocket engines and various industrial gas turbine engines. According to Roskill statistics, in the downstream applications of superalloys, by value, the aerospace field accounts for 55%, followed by the power field, which accounts for 20%.
Superalloy is an important material of aero engine, which is the performance guarantee of many core components. According to the Development of Aero Engine Material Structure, in the new aero engine, the amount of superalloy accounts for more than 40% to 60% of the total weight of the engine, which is mainly used in the combustion chamber, turbine guide blade (also known as the guide), turbine working blade, turbine disk and other hot end components, in addition to the casing, ring, tail nozzle and other components.
Ships and warships: concentrated in the power plant of ships
The application of superalloy in ships and warships is also mainly concentrated in the structural parts of the power plant and a large number of high temperature bolts used in the power plant. Ship power equipment in the world is divided into main power (mainly large diesel engines or nuclear reactors) and auxiliary power (mainly gas turbines), both of which require the use of a large number of high-temperature alloys.
Diesel engine has the advantages of high thermal efficiency and wide power range, which accounts for a large share in the ship power plant. Superalloy is mainly used in the pre-combustion chamber nozzle of large diesel engine, high temperature corrosion resistant elastic parts and fasteners, air valve and gas seat alloy, supercharger turbine, supercharger and exhaust system. The parts that need to use superalloys in gas turbines include air compressors, combustion chambers, impeller systems and gear reducers. The temperature of the gas sprayed onto the impeller is as high as 1300 ° C, so the impeller system needs to choose superalloy materials.
Market size: The annual market size of more than 10 billion
The domestic production capacity of superalloy is limited, and there is a large gap between supply and demand for a long time. According to statistics, in 2019, China's superalloy gold market reached 16.98 billion yuan, with a production of about 27,600 tons, but the overall market demand for superalloys was about 48,200 tons, and the gap between supply and demand reached 20,600 tons. It is expected that the annual demand for superalloy in China will be about 58,200 tons in the future, and the market space is broad.
Competition pattern: The global oligarchy features
Due to high technical difficulty, long process accumulation time, long product verification cycle, large initial investment and other threshold factors, only no more than 50 enterprises in the world have the ability to produce aerospace superalloys, mainly concentrated in the United States, Britain, France, Germany and other countries, and the industry shows oligarchic characteristics.
04 | aluminum alloy
Low cost, high modulus: the most widely used structural materials
Aluminum is the most abundant metal element in the earth's crust, and it is the non-ferrous metal second only to steel in terms of output and consumption, with a density of only 2.7g/cm, about 1/3 of steel. Because pure aluminum is softer and has low strength, better aluminum alloys are made by adding a small amount of elements (such as magnesium, copper, zinc, silicon, lithium, etc.) to aluminum.
Because aluminum alloy has excellent mechanical properties and corrosion resistance, it is the most widely used class of non-ferrous metal structural materials in the industry, and has been widely used in construction, aerospace, automotive, machinery manufacturing, shipbuilding and chemical industries. Aluminum alloys used in the military industry are mainly aluminum-lithium alloy, 2XXX (A1-Cu-Mg) series and 7XXX series aluminum alloys.
Industrial chain: to high-end aluminum development
The upstream of the aluminum industry chain is the metal mining and smelting industry, which is mainly composed of three links: bauxite mining, alumina refining and electrolytic aluminum production. After processing electrolytic aluminum (mainly casting and rolling), aluminum alloy castings, aluminum strip and aluminum profiles are obtained. The downstream enterprises of the industrial chain through the purchase of aluminum processing materials are widely used in construction, automobiles, aerospace, ships, packaging and other fields.
Competition pattern: low-end homogenization, high-end dependence on imports
The equipment level of domestic aluminum processing enterprises shows a two-level differentiation phenomenon, and there is a serious excess capacity of low-end products, but high-end aluminum still needs to rely on imports. At present, the status quo of the domestic aluminum processing industry is that the number of enterprises is large, more than 1,500, but the size is uneven, the production capacity reaches more than 200,000 tons of about 25, alumina, primary aluminum production in China are more than half of the proportion.
Worldwide, the main manufacturers of aluminum for civil aviation are American aluminum Company (Alcoa), Aleris Aluminum Company (Aleris), Kaiser Aluminum and Chemical Company (Kaiser), and Canadian Aluminum Group (Alcan). The technological gap between these enterprises in China and abroad is still large, especially in alloy research and development and basic theoretical research.
