Research and analysis on the development of Chinas hard metal tools in 2012

Currently, among the cutting tools consumed by China's hardware manufacturing industry, cemented carbide tools account for over 50%, highlighting a severe disconnect between supply and demand. China produces 16,000 tonnes of cemented carbide annually, accounting for about 40% of global production. However, the output of cutting inserts, which have the highest added value among cemented carbide products, is only 3,000 tonnes, representing 20% of the total. This situation not only results in insufficient supply of much-needed cemented carbide tools domestically but also fails to fully utilize valuable cemented carbide resources. Consequently, a large surplus of high-speed steel tools is exported or sold domestically at low prices, while high-efficiency cemented carbide tools have to rely heavily on imports. Imports have surged from USD 90 million in 2001 to USD 450 million (approximately RMB 3.6 billion) in 2005.

In developed countries, cemented carbide tools currently dominate the cutting tool market, accounting for 70% of the total. High-speed steel tools are shrinking at a rate of 1% to 2% annually and now represent less than 30% of the market. Superhard tools such as diamond and cubic boron nitride account for about 3%.

In terms of economic benefits, China's annual sales revenue from cemented carbide is approximately USD 560 million. Despite producing only 40% of China's output, Japan's sales revenue reaches USD 2.633 billion, with cutting inserts (tools) accounting for 72% of the total, fully utilizing resources and yielding good profits for enterprises. China's tool industry should draw some useful insights from this.

In recent years, technological advancements in multiple high-end manufacturing sectors in China have imposed new requirements on cutting tools. For example, automotive cutting tools must be efficient, highly stable, and specialized. As the automotive industry continues to evolve, new requirements emerge, characterized by trends such as heavy-duty performance, multifunctionality, specialization, standardization, high-speed operation, and product diversification. In the aerospace manufacturing sector, with the widespread use of difficult-to-machine materials like titanium alloys and high-temperature alloys, the proper selection and utilization of cutting tools for efficient and high-quality machining have become crucial industry topics.

Domestic cutting tools should have natural advantages in serving these manufacturing sectors. However, in reality, imported cutting tools dominate high-end users in the machining industry. Particularly in automotive engine manufacturing workshops, aircraft engine manufacturing enterprises' machining workshops, or steam turbine manufacturing workshops, high-efficiency, high-precision machining tools are almost entirely monopolized by imported products, with domestic cutting tools rarely seen. Conversely, domestic cutting tools are primarily used by customers with medium to low requirements, such as those in the agricultural machinery, motorcycle, agricultural vehicle, general machinery, and mid-to-low-end mechanical manufacturing industries. Furthermore, the extensive development of the manufacturing industry has led to a significant imbalance between machine tools and cutting tools. According to Luo Baihui, Secretary-General of the International Mold Association, the consumption ratio of CNC machine tools to cutting tools is 2:1 in developed countries, but in China, this ratio is excessively low, with total cutting tool consumption accounting for less than one-fifth of total machine tool consumption. Many manufacturing enterprises invest heavily in machine tools but are reluctant to purchase advanced and efficient cutting tools, resulting in a persistently high demand for traditional cutting tools. This is also a major reason why many domestic cutting tool companies are hesitant to enter the production of advanced and efficient cutting tools. SGS Cemented Carbide Milling Cutter.