High-temperature alloys - Key materials in modern industrial equipment.

High-temperature alloys are widely used in both military and civilian industrial fields, serving as key materials for manufacturing engine and gas turbine hot-end components. The demand for national defense construction and strong government support continue to drive the development of the high-temperature alloy industry, with a broad market outlook. Introduction to high-temperature alloys: High-temperature alloys generally refer to alloys based on iron, nickel, or cobalt that can resist oxidation or corrosion at temperatures above approximately 600°C and can work under certain stress for extended periods. Iron-based high-temperature alloys typically reach temperatures around 700°C and are mainly used in transportation, petrochemical, mining metallurgy, etc.; cobalt-based high-temperature alloys are limited by the mining and use of cobalt elements and have not yet achieved widespread application; nickel-based high-temperature alloys hold a particularly important position in the entire field of high-temperature alloys, maintaining good mechanical properties in harsh environments above 1000°C, thus being widely used to manufacture high-performance aircraft engines and various industrial gas turbine hot-end components. In research and development applications, they are generally classified into cast high-temperature alloys, deformed high-temperature alloys, and several other new types of high-temperature alloys based on preparation processes. Among them, deformed high-temperature alloys are the most widely used, accounting for about 70%, while cast high-temperature alloys and new types account for 20% and 10%, respectively. Application expansion from aerospace to other industrial fields: High-temperature alloy materials possess excellent resistance to high temperatures, corrosion resistance, and fatigue resistance. Initially due to complex manufacturing processes making mass production difficult, they were mainly applied in aerospace fields. With technological advancements and increased production capacity, they have gradually been applied in power generation, machinery, industry, automotive sectors etc. According to Roskill statistics, approximately 300 thousand tons of high-temperature alloy materials are consumed globally each year; about 55% is used in aerospace fields followed by the power sector at 20%.

In the aerospace field, high-temperature alloys are key materials for manufacturing hot-end components of aerospace engines. In liquid rocket engines, the proportion of high-temperature alloy applications approaches half of the total weight and is gradually showing trends towards complexity, thin-walling, composite structures with multiple functions without excess margin. In advanced aircraft engines, critical load-bearing components at hot ends are all made from high-temperature alloys; their usage accounts for over 40%-60% of the total engine weight. The performance level of an engine largely depends on the performance level of its high-temperature alloy materials. In civilian industrial sectors, the application scope of high-temperature alloys continues to expand; particularly notable progress has been made in industries such as petrochemicals glass fiber manufacturing where heat-resistant corrosion-resistant alloys are applied significantly. Taking industrial gas turbines as an example: their demand is rapidly increasing; besides power generation purposes they are also used for ship propulsion systems and natural gas compression stations etc. Additionally series products like nanomaterials series biomedical materials series electronic engineering target material series etc., related to high temperature environments continue developing to meet relevant corrosive environment requirements under policy support leading to rapid development of China's high temperature alloy industry.

Insufficient supply leads to a healthy industry ecosystem.

China's development of its high temperature alloy industry has been rapid; however there remains a gap between technology levels compared with advanced global standards along with insufficient domestic production capacity where premium varieties have not yet achieved self-control resulting in a significant supply-demand gap. The barriers for new entrants into the field of high temperature alloy production remain elevated while capacity growth primarily relies on existing manufacturers expanding their output which has been relatively slow-paced growth overall within competitive landscape among major players forming cooperative relationships within this sector's characteristics leading it towards being a product category characterized by higher unit prices along with higher gross margins since its first successful trial run GH3030 back in 1956 marking over sixty years since then China’s research production application journey has evolved from non-existence through imitation towards independent innovation achieving remarkable results during these six decades but currently there still exists supply gaps especially concerning premium varieties that have not yet reached self-sufficiency regarding production volumes market lacks unified calculation standards according data from special steel associations indicating member companies produced around eight thousand four hundred ninety-nine tons worth during two thousand nineteen while forward-looking industry research institute estimates suggest annual output around thirty-five thousand tons versus consumption reaching fifty-nine thousand tons according information sourced from China Industry Information Network indicating two thousand eighteen figures show domestic output approximating twenty-two thousand tons against market demand nearing thirty-seven thousand tons reflecting an overall supply gap close towards forty percent due primarily because products require substantial technical content necessitating certain reserves along with R&D capabilities thus creating relatively higher entry barriers while growth within premium product capacities will largely depend upon expansions undertaken by existing enterprises actual effective output increases remain minimal making it challenging short-term fill market gaps.

At the same time, our country's dependence on imported high-temperature alloy materials remains high. This is partly due to relatively backward technology, as high-end products have not been fully localized. In terms of technological level, there is still a significant gap between our country and countries like the United States and Russia. For example, in industries with large applications such as heavy-duty gas turbines and deep-sea oil, as well as in fields like higher-performance aerospace engines, relevant high-temperature alloy material products have not yet achieved full localization and still rely on imports. The characteristics of high-temperature alloys and the industry structure keep their prices and gross profits at a consistently high level. Taking Fushun Special Steel, Steel Research High-Nickel, and Tunan Co., Ltd. as examples, the average price of their high-temperature alloy products has been in the range of 120,000 to 220,000 yuan/ton over the past three years, with a gross profit margin maintained at around 30%. This varies depending on product structure, added value of products, whether downstream customers are military or civilian clients, fluctuations in raw material prices, and yield rates. The competitive relationship within the industry is mainly cooperative; the entry barriers are high for a healthy ecosystem in the high-temperature alloy industry. On one hand, because total supply in the industry cannot meet domestic demand yet, companies aim to achieve technological innovation and expand production capacity to meet market needs for mutual development. On the other hand, due to extensive applications of high-temperature alloys in military fields and under self-controllable requirements, many suppliers have set up dual-channel systems. The entry barriers for high-temperature alloys are significant in terms of technical barriers, sales channels, financial strength, etc. New entrants often face issues with low product yield rates and need to undergo long periods of exploration to improve processes through experience accumulation to enhance product yield rates. High entry barriers will likely keep competition within the industry in a good state for some time to come. High-temperature alloy materials have a very high technical content; special smelting and precision casting processes require substantial technical accumulation. Especially for aerospace application products that have very stringent requirements regarding quality reliability, performance stability, and dimensional accuracy of products—along with subsequent process improvements and yield rate enhancement requirements—the industry demands long-term experience accumulation; thus high-temperature alloys place significant demands on companies' technical reserves, R&D capabilities, and talent cultivation.

In terms of sales channels: first is that there are entry barriers within the industry; applications of high-temperature alloys in military-related production activities must pass strict reviews and obtain military qualifications; there are also corresponding qualification certification management systems in fields such as civil aviation engines and nuclear power equipment; manufacturers need to obtain relevant industry access qualifications and certifications before entering the market. Second is that there is a clear first-mover advantage; since high-temperature alloys are mainly used in various extreme environments where performance stability and quality reliability are crucial considerations for downstream customers—certification by downstream customer systems can take up to 3-5 years—once users select suppliers after rigorous trial procedures they generally do not easily switch again; thus it becomes significantly more difficult for latecomers to penetrate sales channels. In terms of funding: companies dealing with high-temperature alloys need to invest substantial funds upfront to purchase advanced production equipment while also facing long product R&D cycles requiring continuous investment support for new product iterations. In the next three years there will be an increase in capacity by tens of thousands of tons because entry barriers for new players in the field of high-temperature alloys are relatively high; hence most capacity increases will come from existing enterprises expanding production. In recent years—with rapid growth in downstream demand—the supply of high-temperature alloys has been insufficient leading mainstream manufacturers to expand facilities to meet new demands from sectors like engines or petrochemicals under national policy guidance accelerating domestic substitution processes. However due to complex production processes with numerous product grades along with long downstream certification cycles actual output growth may be less than capacity growth.

With demand increasing significantly, market growth can be expected.

The demand for high-temperature alloys in our country is growing rapidly, and the supply-demand gap is difficult to bridge in the short term. In the engine sector, the increase in military aircraft numbers, the advancement of engine maintenance, and the promotion of domestic engine replacement work have clearly increased the demand for high-temperature alloys. The domestic replacement process for gas turbines is accelerating continuously, with significant prospects for high-temperature alloy demand in related fields due to naval shipbuilding and an increase in gas turbine assembly ratios, large-scale construction of natural gas pipelines, and growth in gas power generation projects. In the automotive sector, the increase in domestic automobile production and the continuous rise in the proportion of domestic turbocharged models will lead to a sustained increase in high-temperature alloy consumption. Additionally, demand for high-temperature alloys is also growing continuously in aerospace, nuclear power, petrochemical metallurgy, and other fields. It is expected that from 2020 to 2025, the compound annual growth rate of demand will reach 7.5%. The growth of aviation engine demand is clear; in advanced aviation engines, high-temperature alloys account for more than 40%-60% of the total weight of engines and are mainly used in four major hot-end components: combustion chambers, guide vanes, turbine blades, and turbine discs. Furthermore, they are also used in casings, rings, afterburners, and nozzles. The performance level of an engine largely depends on the performance level of high-temperature alloy materials. High thrust-to-weight ratio, low fuel consumption, and high reliability are key goals for aviation engine development. To improve thrust and efficiency, it is required to raise turbine inlet temperatures as much as possible; data shows that turbine inlet temperatures for engines with a thrust-to-weight ratio of 10 have reached 1580-1650°C. The combustion chamber is the area with the highest temperature among all engine components; gas temperatures inside can reach 1500-2000°C. As a wall material for combustion chambers, high-temperature alloys must withstand temperatures between 800-900°C and can locally exceed 1100°C. In addition to enduring high temperatures, combustion chamber materials must also withstand sudden thermal fatigue stresses caused by periodic ignition starts and impacts from gases. The main materials used to manufacture combustion chambers include high-temperature alloys, stainless steel, and structural steel; among them, deformation-resistant high-temperature alloys are most critical due to their largest usage volume. Guide vanes are also known as turbine guide blades; they adjust the direction of gas flow exiting from combustion chambers and are components that endure both extremely high temperatures and thermal shocks within turbo engines—operating at material working temperatures exceeding 1100°C—but they generally experience lower stress levels below 70MPa. These parts often become distorted due to significant thermal stress or develop thermal fatigue cracks from rapid temperature changes or burn out due to excessively localized heating leading to scrapping; therefore guide vane materials mostly use precision cast nickel-based high-temperature alloys. Turbine blades are critical components within turbo engines operating under harsh conditions; they are classified as first critical parts because they exist at locations with maximum temperature exposure combined with complex stresses under severe environmental conditions. While turbine blades endure extreme heat conditions at lower temperatures than corresponding guide blades by about 50-100°C during operation at high speeds—due to aerodynamic forces and centrifugal forces—the stress on blade bodies can reach up to 140MPa while root sections can experience stresses between 280-560MPa; most turbine blade materials also consist of precision cast nickel-based high-temperature alloys. Continuous improvements in both structure and materials for turbine blades have become one key factor enhancing aviation engine performance. Among four major hot-end components' mass proportions—turbine discs account for a significant share—they serve as important rotating parts within aviation engines where working temperatures aren't excessively elevated (generally around 550-750°C at rims while core sections hover around approximately 300°C). Thus radial thermal stresses on disc parts become substantial especially during normal operations where disc weights range from dozens up to hundreds of kilograms while rotating alongside blades requiring them to withstand immense centrifugal forces leading into periodic large stress low-cycle fatigue during start-up or shutdown processes. High-temperature alloys used for turbine discs feature very high yield strength along with fine-grained deformation-resistant properties alongside powder metallurgy variants too being utilized extensively within aviation engines' domains where military aircraft numbers continue rising alongside advancements made towards maintenance efforts plus domestic replacements indicating promising growth ahead regarding demands placed upon these specialized materials.

The "Suggestions of the Central Committee of the Communist Party of China on Formulating the 14th Five-Year Plan for National Economic and Social Development and the Long-Range Objectives Through 2035" first proposed the goal of "ensuring that the centenary goal of building a strong military is achieved by 2027" when discussing military construction goals. This is a substantial and specific enhancement to past military construction goals, fully reflecting the strategic will and firm determination of the Central Committee to promote strong military development based on national development and security strategies. With the increase in the number of military aircraft, there is also expected to be rapid growth in high-temperature alloy applications for corresponding aircraft engines. Additionally, considering engine testing, stock demand, and limited service life at high temperatures, existing engines will require replacement and major repairs due to flight training needs. It is anticipated that from 2020 to 2025, the compound annual growth rate for high-temperature alloy demand in military aviation engines could reach 6.5%. In the civil aviation sector, there is vast market potential; however, the global market has developed relatively maturely with major production companies including CFM, RR, GE, P&W from Europe and America, resulting in a relatively stable competitive landscape. Domestic civil aviation engines started later; as key components of CJ1000 commercial high bypass ratio engines continue to be tackled, it is expected that this domestic alternative engine for C919 will become a starting point for mass application in domestic civil aviation engines and form a new growth point for high-temperature alloys. The development prospects for gas turbines are enormous. Gas turbines have advantages such as small size, high efficiency, low pollution, and a wide power range; they are widely used in industrial power generation, ships, oil and gas pipeline transportation, heating supply, mine ventilation, etc. Industrial gas turbines are generally divided into four categories based on power levels: micro-sized, light-duty, medium-sized, and heavy-duty. The efficiency and reliability of gas turbines largely depend on the technology level of hot-end components; high-temperature alloys are mainly used in three core components: turbine blades, combustion chambers, and turbine discs. Taking heavy-duty gas turbines as an example: currently there exists a highly monopolized situation dominated by three giants—GE from America, Siemens from Germany, and Mitsubishi Heavy Industries from Japan—with mainstream turbine models having inlet temperatures above 1350°C; almost all materials used for hot-end components are selected from high-temperature alloys. Gas turbine blades operate continuously under high temperatures with corrosive environments and complex stresses for extended periods; compared to aviation engine turbine blades they require even higher durability and corrosion resistance. Due to extensive alloying which reduces plasticity making forging difficult while air-cooling technology requires complex internal shapes that can only be achieved through casting techniques; thus turbine blade materials have shifted from forged alloys to cast alloys. The combustion chamber is the component that endures the highest temperatures in gas turbines; its materials must possess sufficient mechanical strength at elevated temperatures along with good thermal fatigue resistance and oxidation resistance as well as higher fatigue strength under elevated temperature conditions along with creep strength. From a processing perspective combustion chamber materials also need excellent forming properties along with welding performance while minimizing tendencies towards cracking during post-weld heat treatment processes. To meet these operational conditions and processing requirements combustion chamber materials typically use nickel-based high-temperature alloys. The diameter of gas turbine discs can be three to six times larger than those found in aviation engines. The disc rim operates at temperatures between 550-600°C while its center operates below 450°C creating significant radial thermal stress due to temperature differences across various parts; during start-stop operations disc rim teeth experience considerable low-cycle fatigue loads. Therefore materials used for turbine discs must exhibit higher tensile strength and yield strength at operating temperatures; thus besides alloy steel or heat-resistant steel consideration should also be given to selecting deformation-resistant high-temperature alloys with good overall performance when choosing materials for turbine discs. In military applications increased construction of naval vessels along with rising proportions of gas turbine installations will lead to increased demand for high-temperature alloys. Most surface vessels built by countries such as America, Britain, Soviet Union (now Russia), Germany or Japan after the 1970s predominantly utilize all-gas turbine propulsion systems or diesel-gas combined propulsion systems. A 40MW class gas turbine serves as prime mover within integrated electric propulsion systems aboard ten-thousand-ton destroyers or amphibious assault ships' follow-on vessels; a 20MW class gas turbine serves as main mechanical propulsion units or prime movers within integrated electric systems aboard ten-thousand-ton destroyers along with their follow-on vessels or six-thousand-ton destroyers or three-thousand-ton frigates; while a 10MW class gas turbine serves special small surface vessels like hovercrafts within their integrated electric systems' prime movers respectively. China's technology regarding gas turbines remains relatively behind schedule currently our domestically produced marine gas turbines have completed local mass production stages showing promise towards widespread adoption aboard future large frigates large destroyers alongside new amphibious landing ships among surface vessels. In civilian sectors due to China's "West-to-East Gas Transmission", "North-to-South Gas Transmission" initiatives alongside energy structure adjustments within economically developed coastal regions plus distributed energy developments domestic gas turbines serve as most widely utilized drivers during midstream natural gas pipeline pressurization processes experiencing robust market demands alongside accelerated domestic substitution processes leading towards rapid surges in demand for high-temperature alloys. In 2017 China's National Development & Reform Commission together with National Energy Administration issued "Medium-Long Term Oil & Gas Pipeline Planning" proposing nationwide oil & gas pipeline scale reaching up-to169000 kilometers by year-end2020 including104000 kilometers dedicated solely towards natural gases pipelines; by2025 targets aim reaching240000 kilometers where16%of this would consist solely out-of-natural-gas pipelines indicating projected compound annual growth rates hitting9%over next five years. By end2015 national natural-gas networks measured64000 kilometers long whereas by end2018 trunk pipelines totaled76000 kilometers achieving compound annual growth rates around6%slower than planned targets. By end2019 National Pipeline Group officially established focusing investments constructions operations related oil/gas trunk networks storage peak-shaving infrastructures anticipating steady increases regarding natural-gas consumption leading towards accelerated construction speeds concerning natural-gas networks. Assuming over next five years China’s mainline natural-gas network construction speeds improve annually by1% aiming achieving16%of total length reaching163000kilometers by2025 connecting Xinjiang Lunanshan Gas Field directly into Shanghai spanning4000km featuring approximately40pressurization stations installed throughout route assuming average every100km requires1pressurization station each equipped averaging1gas-turbine weighing25tons where40%of weight consists entirely out-of-high-temp-alloys yielding material ratios30%, thus corresponding demands regarding2025high-temp-alloy requirements reach7333tons achieving25%compound annual growth rates respectively. Heavy-duty markets derive incremental sources primarily stemming from growing supplies surrounding natural gases alongside increasing numbers associated with electricity generation projects driving further demands surroundinghigh-temp-alloys. Gas-fired electricity generation boasts characteristics including efficient energy conversions minimal pollutant emissions rapid start-ups flexible operations etc.; in September2019 National Energy Administration issued responses confirming inclusion24projects including Huaneng Nantong Power Plant’sgas-turbine electricity generation project among first batch demonstrating innovation developments focusing22different types associatedwithgas-turbines plus2operation-maintenance services targeting long-term constraints hindering China’sgas-turbine industry particularly concerning critical core technologies surrounding hot-components expecting breakthroughs across various technologies leading towards steady improvements regarding domestic heavy-dutygas-turbines’localization rates respectively. Accordingto Dongfang Electric Group’s fundraising prospectus recent years indicate yearly additions totaling15large-scale natural-gas electricity generation projects equivalent adding30newunits pertainingtowardsgas-turbines.

The price of high-temperature alloys for automotive use continues to rise. High-temperature alloys are mainly applied in automotive turbochargers. Turbocharging technology is an important means to improve engine efficiency, reduce fuel consumption, and decrease exhaust emissions. The turbocharger turbine is the core component of the turbocharger, and its temperature resistance and service life determine the operating temperature and stability of the entire turbocharger. As the speed of the turbocharger increases and its size decreases, its operating temperature gradually rises; currently, exhaust temperatures have reached over 1000°C. Countries around the world are generally upgrading turbocharger materials from heat-resistant steel to cast nickel-based high-temperature alloys, with domestic applications widely using alloys such as K213, K418, K419, and K4002. With the increase in domestic automobile production and the continuous rise in the proportion of turbocharged models, the consumption of high-temperature alloys will continue to increase. In terms of automobile production, in 2020, the outbreak of the pandemic accelerated the process of hitting bottom for automobile industry production and sales. With related stimulus policies being introduced, industry consumption sentiment has warmed up, leading to a steady increase in automobile production and sales. In April, under the influence of a relatively low base in 2019, monthly automobile production and sales returned to positive growth and maintained a relatively fast growth rate. From January to November, cumulative automobile production reached 22.372 million units, a slight year-on-year decrease of 3%. In the long term, China's automotive industry has enormous development space; according to ownership data per thousand people, China's car ownership per thousand people was 173 in 2019, ranking 17th among 20 major countries published by the World Bank on global car ownership per thousand people—far below that of the United States at 837, Australia at 747, Italy at 695, etc. Regarding penetration rates for turbocharged models according to Gaojie Automotive Research Institute: with recent market scale growth in China’s passenger car turbochargers reaching a penetration rate of 32% by 2016; it is expected that this penetration rate will reach 48% by 2020. Under trends toward energy conservation and emission reduction development trends, future penetration rates are expected to continue increasing. Assuming an annual growth rate of vehicle production in China is 2% over five years with a yearly increase in turbocharger penetration rates by 1%, according to Tuanan Co.'s prospectus: each ten thousand vehicles consume about 3.5 tons of high-temperature alloy for their turbochargers; thus it corresponds that by 2025 demand for high-temperature alloys will reach approximately 5182 tons with a compound annual growth rate (CAGR) reaching about 4%. Steady progress in nuclear power construction: In nuclear power equipment manufacturing industries high-temperature alloy materials are mainly used within nuclear islands undertaking nuclear reaction work. Key components using high-temperature alloys include fuel assemblies control rod drive mechanisms pressure vessels evaporators as well as internal components fuel rod positioning grids heat exchangers for high-temperature gas reactors etc. Nuclear power approvals have been steadily advancing which is expected to drive investment growth in nuclear power source construction thereby boosting consumption of high-temperature alloys after Japan's Fukushima nuclear accident led to stagnation from 2016-2018 until July 2019 when projects like Shandong Rongcheng Fujian Zhangzhou Guangdong Taipingling were approved marking formal resumption on nuclear power approvals. In September 2020 during a State Council executive meeting approval was granted for Hainan Changjiang Nuclear Power Phase II project Zhejiang San'ao Nuclear Power Phase I project emphasizing active prudent advancement on nuclear project construction as an important measure for expanding effective investment enhancing energy support reducing greenhouse gas emissions according to Tuanan Co.'s prospectus: one million kilowatt nuclear power unit consumes about500 tons of high-temperature alloy material; In June2020 China Nuclear Energy Association released "China Nuclear Energy Development Report (2020)" proposing that during "14th Five-Year Plan" period along with mid-to-long-term plans nuclear construction is expected at six-eight units annually steadily advancing; it’s estimated that by end-2020 total installed capacity operationally would reach52 million kilowatts while under construction would exceed19 million kilowatts; By2025 operationally installed capacity should reach70 million kilowatts while under construction should be30 million kilowatts assuming annually adding500 megawatts worth new units would lead annual demand increase around2500 tons.