Forging industry: analysis of competition pattern, industry entry barriers and influencing factors
I. Overview of forging industry
Forging is a processing method to produce partial or total plastic deformation of the billet or ingot under the action of pressurized equipment and work (die) tools to obtain certain geometric size and shape of the part (or blank) and improve its organization and performance. After the forging process. The metal material has good shape and dimensional stability, uniform organization, reasonable fiber organization, and the best comprehensive mechanical properties. The main load-bearing structure or secondary load-bearing structural parts in machinery and equipment are generally made of forgings, which are widely used in various fields of national economy and defense industry. According to the size and shape of forgings. The structure of tooling and forging equipment, forging can be divided into free forging, die forging and ring rolling.
| Forging process classification | Free forging |
| Die forging | |
| Ring rolling |
1. Ring rolling
Ring rolling, also known as ring rolling, is a plastic processing process to produce continuous local plastic deformation of ring parts with the help of ring rolling machine to achieve wall thickness reduction, diameter expansion and section profile forming. The stress-strain and deformation flow during rolling and reaming are the same as that of mandrel reaming, characterized by rotating tool, continuous deformation, and small press down amount during rolling and reaming, so it has the characteristics of surface deformation.
Compared with traditional free forging process and die forging process, ring rolling can significantly reduce equipment tonnage and investment, and has the advantages of small vibration and impact, energy and material saving, high production efficiency and low production cost, etc. It is an advanced processing technology for seamless ring parts, which is widely used in aviation, aerospace, shipping, electric power, petrochemical and other industrial fields. It is widely used in many industrial fields such as aviation, aerospace, shipping, electric power, petrochemical and other machinery.
2. Free forging
Free forging refers to the processing method of forging parts with simple general-purpose tools, or directly applying external force to the billet between the upper and lower anvils of the forging equipment to deform the billet and obtain the required geometric shape and internal quality. Free forging to produce a small number of forgings, using forging hammers, hydraulic presses and other forging equipment to shape the billet processing, in order to obtain qualified forgings.
3. Die forging
Die forging refers to the metal billet in a certain shape of the forging die chamber pressure deformation and obtain forgings, die forging is generally used for the production of small weight, large batch of parts.
Ⅱ. The main features of forging processing
Forging technology in the production and processing of tool parts, with high production efficiency, forging comprehensive performance and other advantages, so it is widely used in the equipment manufacturing industry in the key and core components. Compared with other metal processing methods, forging processing mainly has the following characteristics.
| Main features of forging processing | Machining object special |
| Processing equipment discipline | |
| Complex processing technology |
1. Special processing objects
High temperature alloys, aluminum alloys. Titanium alloys and other special alloy materials are often widely used in the field of major equipment, such as aero engines, gas turbines, rockets, satellites, missiles, etc. Special alloy forging belongs to the high-end area of the forging industry, which is not only an important guarantee of enterprise profit margin, but also an important reflection of the comprehensive technical strength of the enterprise. Special alloy forging products are mainly used in aviation, aerospace and other key industries affecting national defense security, because of the low plasticity of such materials in the forging process, high deformation resistance, poor fluidity, forging temperature range is narrow. The overall forging difficulty. The technical strength of enterprises, equipment levels and management capabilities are put forward high requirements. In the industry, only enterprises with strong R & D strength, high technology and technical level, advanced equipment and stable processing and production of high-quality special alloy forgings have the opportunity to obtain a higher level of profit return.
2. Processing equipment professional
Forging industry has the characteristics of large investment and long construction cycle, and is a typical capital-intensive industry. Due to the strong special characteristics of special alloy materials, it is decided that its processing equipment must have a high performance. Therefore, forging enterprises usually need to invest a lot of money to purchase modern design software, high-precision CNC forging equipment and ring rolling equipment, high-uniformity heating equipment, high-performance heat treatment equipment, CNC machining equipment and complete sets of physical and chemical testing equipment, etc.. To meet the requirements of different production processes and downstream equipment manufacturing enterprises for production.
3. Complex processing technology
The main function of forgings is to withstand external forces or transfer torque in the work, usually need special process to meet its required performance. The main production process of forging products includes the material, heating, forging, ring rolling, heat treatment, metal processing, physical and chemical testing, etc. The processing involves metallurgy, metal processing, heat treatment and modern mechanical design and manufacturing technology and other multidisciplinary, multi-disciplinary technology. The overall technology integration is high. In addition, forging products have typical multi-species, multi-specification, customized features. The structure of different products vary greatly, requiring companies with a large number of specialized technical workers, precise control of various technical parameters in the production process, in order to ensure product quality. Therefore. The forging industry, especially in the field of large forgings and special alloy forgings manufacturing has the characteristics of complex manufacturing process and high technical threshold.
Ⅲ. The forging industry competition pattern
From the global forging industry, Germany. The United States, Russia, Japan. The United Kingdom and other developed countries, in raw materials, equipment level, forging technology and process are in the world’s leading position, relying on high-end production equipment and advanced processing technology, can produce large size, high precision, high performance products, long-term occupation of the world’s major high-end applications market. In recent years, with the economic development of China, India and other developing countries. The level of forging equipment has improved greatly, forging capacity has steadily increased, in some product areas to form a competitive market pattern with developed countries, but China’s forging industry in raw materials, heat treatment processes, forging technology and other aspects of developed countries still exist a certain gap, which restricts the further development of China’s forging industry.
From the domestic market. The number of forging enterprises in China. The competition is relatively fierce, most forging enterprises are mainly engaged in the production of ordinary carbon steel, alloy steel, stainless steel materials and other forgings, high-temperature alloys. Titanium alloys, aluminum alloys, magnesium alloys and other special alloy materials. The overall lack of processing capacity, product technology content and added value is relatively low. The process level is relatively backward. With the development of the national economy and the country’s strong support for high-end equipment manufacturing and important basic components industry. The domestic forging industry is gradually developing in the direction of “special, precise, special, new”. With the development of China’s major equipment manufacturing industry. There are a number of domestic enterprises with strong technical advantages in the field of specific forgings. The production of high-end forgings have gradually begun to replace imports, and has the ability to participate in international competition.
In the field of military products, enterprises in the industry mainly include large state-owned military enterprises or their subordinate enterprises, and some “civilian participation in the military” enterprises. By virtue of their technical advantages, financial strength and scale advantages, state-owned large military enterprises have become the main producers of military products and have significant competitive advantages. With the substantial promotion of the civil-military integration strategy. The marketization of the military industry has been accelerated and the “civil participation in the military” has been deepened, and some private enterprises with military production qualifications have rapidly emerged to expand their market share in the field of military products.
Ⅳ. Main characteristics of forging industry
1. Cyclicality
The forging industry is a basic industry of national economy and national defense industry, which is influenced by the overall economic cycle fluctuations and national defense construction, so it has strong pro-cyclical characteristics, but the development of the industry generally will not be affected by the changes in a downstream industry.
2. Regional
Forging industry has a wide range of downstream applications, and different application areas are located in different regions. For example. The production of forging flanges mainly used in wind power industry is mainly concentrated in Jiangsu, Shanxi, Zhejiang, Shandong and Hebei, etc.; the production of forgings used in aerospace field also exists in certain regions, such as Liaoning, Sichuan, Guizhou, Shaanxi, Shanghai, etc., because they serve the host manufacturers and according to the domestic military production layout.
3. Seasonality
The upstream of the forging industry is steel smelting, and the downstream involves various industries of national economy and national defense industry, and the production and operation of forgings are not affected by seasonal conditions, so the forging industry does not have obvious seasonal characteristics.
V. The main barriers to enter the forging industry
1. Brand and market barriers
Forging products have the characteristics of multiple specifications, multiple varieties and customization, and the development of forging industry is inseparable from the customization demand of downstream customers. Therefore, it is necessary to establish relatively stable partnership with major customers. In the civil field, on the one hand, before establishing a cooperative relationship with customers, customers have complex assessment procedures for suppliers, long inspection cycles, and specific requirements for product quality, product specifications, and supply time; on the other hand, once the two sides establish a cooperative relationship. The relationship will generally be relatively stable, and there is a certain degree of difficulty for other similar manufacturers to enter. In the military field. The launch of a new equipment needs to go through forging product manufacturers, component manufacturers, research institutes, host plants and other long time design, research. Testing, verification, modification and other procedures, and by the military inspection before finalizing the production; at the same time, military customers to the quality of the products provided by the suppliers. Technology and other requirements are extremely high, in order to ensure product consistency and stability, once the confirmation of an equipment In order to ensure the consistency and stability of products, once the supply relationship is confirmed, usually the supply relationship of the equipment will be long-term and stable. Therefore, latecomers in this industry will face certain brand and market barriers.
2. Production experience and talent barriers
Forging products have the characteristics of multiple specifications, multiple varieties and customization. Advanced production equipment, fine quality management and long-term accumulation of production experience are important guarantees for the long-term development of forging manufacturers. In order to ensure the consistency, stability, reliability and advancement of products, enterprises need a large number of professional R&D personnel and skilled technical staff, and the training of these professional and technical personnel and their technical mastery require a long period of accumulation of enterprises. Therefore. This industry has certain production experience and talent barriers.
3. Qualification barrier
For different downstream applications. The production and sales of forgings have different qualification access requirements. In the civil field, such as the supply of products for ships need to obtain the corresponding classification society certification. The production of supporting products for pressure vessels need to obtain the “special equipment manufacturing license” and so on. In the military field. The state has more stringent qualification requirements for private enterprises to participate in the supply of military products, need to obtain “weapons and equipment research and production license”, “confidential qualification unit certificate”, “equipment contracting unit qualification certificate” and other qualifications, and private enterprises need to go through the military on its product performance, quality control. Technical level, R & D capabilities and a series of comprehensive assessment and meet the requirements before they can cooperate with The military industry can only cooperate with military enterprises to provide products for them. Therefore. The higher qualification requirements. The new entrants form a higher barrier.
4. Equipment and capital barriers
Forging industry has the characteristics of large investment and long construction period, and is a typical capital-intensive industry, and rolling ring forgings, large free forgings have high requirements for equipment, such as forging presses, ring rolling machines and other large equipment. The value of imported equipment is often over 100 million, and the capital requirements are high. In addition, due to the characteristics of the industry, raw materials account for a large proportion of the main business costs, raw materials procurement and production and operation turnover need to take up a lot of working capital. Therefore, enterprises involved in this industry must have strong financial strength or fund-raising capabilities, forming a high capital barrier to new entrants.
Ⅵ. To promote the development of forging industry analysis of favorable factors
1. The active support of industrial policy
Based on the basic position of the forging industry in the national economy, since the reform and opening up. The government and industry authorities have given strong support in policies. 2015. The state has promulgated the “Made in China 2025” and the “13th Five-Year Plan for National Economic and Social Development”, based on the above policies, China Forging and Press Association promulgated the “China Forging and Press Industry Based on the above policies, China Forging and Press Association promulgated the “Thirteenth Five-Year Plan” and other policies, which provide strong policy support and guidance for the development of the industry. Made in China 2025″ put forward “three steps” manufacturing power strategic goals, while pointing out that the core basic components (components), advanced basic processes, key basic materials and industrial technology base and other industrial infrastructure capacity is weak, is the crux of the restriction of China’s manufacturing innovation and development and quality improvement. To focus on cracking the constraints of key Industrial development bottlenecks. The “Thirteenth Five-Year Plan” puts forward the in-depth implementation of “Made in China 2025”, focusing on improving manufacturing innovation and basic capabilities, promoting the deep integration of information technology and manufacturing technology, promoting the development of manufacturing industry in the direction of high-end, intelligent, green, service, and cultivating new competitive advantages in manufacturing. The “Thirteenth Five-Year Plan” of China’s forging industry puts forward the automation, informationization and digitalization of the forging industry in the next five years as the key development direction of the industry.
2. Civil-military integration has risen to the national strategy
At present, civil-military integration has been upgraded to a national strategy, and the plenary session of the Civil-Military Integration Committee has been held twice, and civil-military integration has been deepened. In the specific operation and policy level. The first batch of 41 military research institutes reform to start implementation, airspace management system, military pricing bargaining rules, equipment procurement system and other reform programs began to deepen the demonstration, weapons and equipment research and production licensing and equipment contractor joint review work mechanism is fully pushed. The fences and barriers to civil-military integration is gradually broken. In the field of supporting, aviation, aerospace, naval, weapons and other supporting market will be more open, more civilian enterprises will participate in military business; and traditional military supporting enterprises will also strengthen the technology and product transformation. Take the initiative to participate in civilian supporting; with the gradual integration of military and civilian supporting market, market participants will gradually increase, competition will also tend to fierce, supporting the technical capabilities of enterprises will become the core competitiveness of enterprises, become Enterprise sustainable and healthy development of the guarantee.
3. National defense construction needs continue to pull the industry development
With the upgrading of China’s great power status. The current international pattern is changing, China’s surrounding political and economic environment also tends to be complex, a variety of unstable factors appear frequently. In order to establish and maintain China’s great power status, improve the ability to deal with changes in the surrounding environment. The Ministry of National Defense in the “China’s Military Strategy” white paper clearly pointed out that building a consolidated national defense and a strong military is a strategic task of China’s modernization and is a security guarantee for the country’s peaceful development.
With the changes in the international landscape in recent years, in order to improve China’s ability to respond to changes in the international situation, China needs to continue to strengthen its defense investment in order to guarantee its modernization and national security. Increased investment in national defense will improve the demand for military equipment. Thus driving the development of the military forgings industry.
4. Technology development and certification to promote industrial upgrading
In recent years. The forging industry, under the guidance of a series of national encouragement policies, insists on the combination of foreign introduction and independent innovation in the research and development mode, forming a number of high-end forging products with independent intellectual property rights, and the steady improvement of the overall technical level of the forging industry has strongly promoted the development of China’s forging industry in the direction of high-end.
Due to the qualification certification of some areas of the forging industry and the certification of qualified suppliers for high-end customers, it is more difficult for some enterprises with low R&D investment, low management level and low competitiveness in the industry to enter the high-end field, and with the improvement of the technical level of the whole industry and the optimization and adjustment of the industrial structure. These enterprises which mainly rely on price competition will be gradually eliminated. Technical progress and qualification of the forging industry will promote the development of the whole industry to a higher level and a more reasonable industrial structure.
VII. Analysis of the unfavorable factors affecting the development of the forging industry
1. The lack of scale advantages and industry chain synergies
The number of forging enterprises in China is large, most of them have small production scale, relatively backward equipment, low technical level, low industry concentration, fierce market competition, unable to achieve significant scale effect, while some enterprises lacking in equipment and technology. Through price-oriented vicious competition, disrupting the normal market order and affecting the development progress of the industry.
2. The upstream of new materials R & D capabilities are weak, production levels vary
On the one hand. The upstream special steel industry R & D, production levels vary. The research and development of new materials and improve material size and performance stability awareness is not prominent enough, compared with the world’s advanced level there is still a gap. On the other hand, at present, China in the aviation, aerospace and other fields of high-end forgings with raw materials compared with foreign developed countries still exists a big gap, some raw materials and even all rely on imports, which greatly affects the development of China’s forging industry.
3. High-end forgings technology level is relatively backward
The structural contradiction of China’s forging industry is relatively prominent, and the international competitiveness in high-end forgings is relatively weak. Due to the shortage of relevant professional and technical personnel, shortage of expert talents, lack of young professionals and insufficient accumulation of material database. Thus restricting the development of the technical level of high-end forgings.
Source: China Flange Forgings Manufacturer – Yaang Pipe Industry (www.epowermetals.com)
(Yaang Pipe Industry is a leading manufacturer and supplier of nickel alloy and stainless steel products, including Super Duplex Stainless Steel Flanges, Stainless Steel Flanges, Stainless Steel Pipe Fittings, Stainless Steel Pipe. Yaang products are widely used in Shipbuilding, Nuclear power, Marine engineering, Petroleum, Chemical, Mining, Sewage treatment, Natural gas and Pressure vessels and other industries.)
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