New changes in China's machine tool consumption market

In recent years, due to the slowdown of China's economy, investment growth and the upgrading of demand structure, the total scale of China's machine tool and tool consumer market has shown a stage of decline. The following is a description of the changes in consumption, production and imports from the two main sub-product areas of metalworking machine tools and tools.
The consumption of metalworking machine tools has experienced a three-step decline from 2015 to the highest level in 2015. The first step is the relatively high level of 2011-2012, which is 390.9 and 38.28 billion US dollars respectively; the second step is a significant decline from 2013 to 2014, which is 319.1 and 31.83 billion US dollars respectively; the third step is 2015-present A slight decline, the machine tool consumption in 2015 was 27.5 billion US dollars, the first half of 2016 was 12.9 billion US dollars, down 9.2%. The production trend of metal processing machine tools is similar to the change in consumption, and it basically forms a three-step decline in synchronization with consumption. In the first half of 2016, the production of metal processing machine tools was 10.4 billion US dollars, down 8.8% year-on-year. Although the import of metalworking machine tools has also declined, the third step is not obvious, mainly due to the gradual slowdown of imports in the later period. In the first half of 2016, the import value of metal processing machine tools was US$4 billion, down 6.1% year-on-year.
The Chinese tool consumer market experienced a significant decline in 2015 after experiencing a slow-changing “turtle-back” growth. In 2015, the consumption of tools was US$4.5 billion, down 12.1% year-on-year. In the first half of 2016, the consumption of tools was US$1.9 billion, down 20.8% year-on-year. Among them, the operating trend of China's tool production is basically synchronized with the consumption, and the main reason for the significant decline is that the demand for low-end cutting tools has shrunk dramatically. The fluctuation of import value of tools is not large. In the first half of 2016, the import value of tools was 700 million US dollars, down 6.2% year-on-year. This is related to the fact that import tools are mainly oriented to the middle and high-end sectors and the middle and high-end demand remains relatively stable.
Despite a significant decline, China's machine tool consumer market is still the world's largest market, occupying an important position. According to global machine tool consumption and trade data, China's machine tool consumption ranked first in the world in 2015, accounting for 34.8% of the total, 3.7 times that of the second US; in 2015, machine tool imports ranked first in the world. It accounted for 20.6% of the total, which is 1.9 times that of the second place in the United States. According to the relevant data estimates for the first half of this year, it is expected that the decline in China's machine tool consumption will further narrow this year, and will maintain its position as the world's largest market.

Significant structural change
The prominent feature of the recent Chinese machine tool consumer market and industry is the obvious structural changes. The following is an analysis of structural changes from both the subdivision and the import.
Demand in emerging markets is rapidly increasing, and demand in traditional industries is sluggish. From the analysis of fixed assets investment data of the National Bureau of Statistics, in the first half of 2016, among the 30 sub-sectors of China's manufacturing industry, investment growth rate increased by 66.7%, and investment growth rate declined by 33.3%. The data at the end of 2015 were respectively 86.7% and 13.3%. In terms of growth rate, the investment growth rate in the first half of 2016 in the double-digit segment is: culture, education, sports and entertainment products manufacturing (17.1%), food manufacturing (15.9%), textile industry (12.9%). ), electrical machinery and equipment manufacturing (12.3%), pharmaceutical manufacturing (11.7%). In the first half of 2016, the drop in investment in the double-digit segment was: metal products, machinery and equipment repair (-34.9%), tobacco products (-17.7%), and transportation equipment manufacturing (-11%). . In terms of investment amount, the top three are non-metallic mineral products ($113.1 billion), chemical products manufacturing ($99.9 billion), and general equipment manufacturing ($90.2 billion); the last three are tobacco products ( $1.3 billion), metal products, machinery and equipment repair ($1.9 billion), and chemical fiber manufacturing ($8.1 billion).
Metal cutting machine tools have slowed down, and metal forming machines have not yet bottomed out. Regardless of market consumption or production data, the decline in metal cutting machine tools has narrowed recently. In the first half of 2016, the consumption of metal cutting machine tools was US$8.3 billion, down 3.5% year-on-year. Compared with the end of 2015, the growth rate rebounded by 10.9 percentage points; the consumption of metal forming machine tools was US$4.6 billion, down 17.9% year-on-year. Compared with the growth rate, the growth rate dropped by 5.6 percentage points. In recent years, the structure of China's machine tool consumer market has accelerated, and the outstanding performance is that the demand for non-CNC machine tools is shrinking rapidly. As the segmentation of metal cutting machine tools has been adjusted earlier, the adjustments have been carried out more fully, and the proportion of CNC products has been continuously improved, so it has begun to adapt to the current market demand structure. In contrast to the segmentation of metal forming machine tools, the adjustment has just begun, and the rapid decline in non-CNC demand will inevitably lead to market downturn.
The decline in demand for low-end tools further reflects the under-employment of low-end manufacturing. In the first half of 2016, the import of cutting tools, cemented carbide blades increased by 2.8%, ordinary turning tools decreased by 10.9%; cemented carbide files increased by 12.9%, and ordinary boring tools decreased by 13.1%; cemented carbide The drill bit decreased by 1.4% year-on-year, and the average drill bit decreased by 9%. From 2015 to the present, the sales of high-speed steel standard tools represented by high-speed steel drills, turning tools, milling cutters, etc. have fallen sharply, with a drop of about 30%, which echoes the trend of shrinking sales and use of non-CNC machine tools. Since tool consumption reflects the operating rate of manufacturing, structural changes in tool consumption also indirectly reflect structural changes in equipment use in manufacturing.
Changes in the source of imports, the top five sources of metal processing machine tools imported in the first half of 2016 were: Japan (1.19 billion US dollars, -9.6%, share 30%), Germany (1.08 billion US dollars, 4.8%, share 27.1%) ), Taiwan (US$420 million, -17.4%, share of 10.5%), South Korea (US$290 million, -17.3%, 7.2%), Switzerland (US$220 million, -0.2%, 5.6%) . The top five import sources of cutting tools are: Japan (190 million US dollars, -6.7%, share 29.4%), Germany (120 million US dollars, -18.9% year-on-year, 19.5% share), Sweden (0.6 billion US dollars, 24.7% year-on-year) %, share 10.2%), Taiwan ($0.6 billion, -5.4%, share 9.9%), South Korea ($0.5 billion, 9.9% year-on-year, 8.3% share).
Changes in the import structure, the top three imports of metal cutting machine tools in the first half of 2016: processing centers (1.5 billion US dollars, -7.3%, share 45.9%), grinding machines (550 million US dollars, 9.2% year-on-year, share 16.8) %), special processing machine tools ($420 million, year-on-year -10.2%, share of 12.8%). The top three metal forming machine tools are: punching and shearing machine tools ($310 million, -3.9%, share of 43.7%), forging machine tools ($190 million, -24.1%, share of 26.8%), presses (100 million) US dollars, -38.8% year-on-year, 14.1% share). The top three cutting tools are: carbide inserts ($280 million, 2.8%, 40% share), drills/tapping tools ($130 million, -11.7%, 18.6%), milling cutters (0.9 billion) US dollar, -6% year-on-year, 12.9% share).

New challenges and new opportunities
The decline of China's economy in recent years is mainly due to the impact of new and old kinetic energy conversion and structural upgrading of economic development. Machine tool products belong to the production materials. It is obviously impossible to be independent when the domestic user industry needs change and structural adjustment and upgrading, and it will definitely be directly or indirectly affected. In recent years, heavy machine tool manufacturers have experienced severe performance declines due to changes in energy and steel demand, which is the most typical example. It can be said that these incompatibility with changes in market demand and how to adapt to new market demands are new challenges that need to be faced in today's machine tool consumer market in China.
There is an old saying in China that "the old is not going, the new is not coming". As far as China's industrialization and consumption potential are concerned, these new challenges are born with more new opportunities. First of all, China's industrialization has not yet been completed, and many basic links and equipment conditions are still weak, and there is huge room for growth. By comparing the industrialization development process of “Industry 4.0”, only a very small number of Chinese industries are in the “Industry 4.0” stage, most of them are in the middle and early stage of “Industry 3.0”, and even certain industries or enterprises are in “industrial”. 2.0" stage. This makes it understandable that in the past decade or so, there will always be about 1/3 of the consumption structure of the Chinese machine tool market is non-CNC machine tools. This imbalance in industrial development means that the stable demand for machine tool consumption in the future may not be as large as historically, but the added value will certainly be higher than before. Second, China is the world's largest manufacturing country, has established a complete industrial system, and has many high-quality laborers. These advantages will help Chinese manufacturing to serve both domestic and foreign markets in the future. As China is entering the stage of population aging, the quality and quantity of labor will show a downward trend. In order to make up for the shortage of labor and rising costs, the requirements for manufacturing equipment will continue to increase in efficiency, automation and intelligence. Some of the low-end machine tool stocks formed during the high-speed growth of investment in the past few years will be eliminated or modified ahead of this increase, rather than waiting for their life to expire. We estimate that this part of the demand will form a certain degree of explosive growth with the changes in China's labor structure. Finally, it is the energy-saving and environmental protection requirements that match the growth of China's economy and the improvement of international status, and the upgrading of the consumption level of machine tools brought by the development of emerging strategic industries. High-precision, high-efficiency, high-performance, automated and complex manufacturing demand solutions in manufacturing, such as medical, aerospace, defense, energy, transportation, and electronic information, with better unit energy productivity The sustainable development of China's economy and manufacturing.
We have reason to be confident in the long-term development of China's machine tool consumer market.

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