With the recent disclosure of the 2023 annual performance report by listed companies, the market situation and industry development of domestic carbon fiber have once again attracted great attention from the industry and the capital market.
After experiencing a good market in the past few years of short supply and rising prices, the carbon fiber industry has entered a period of adjustment from last year to the present. A number of new production capacity has been released one after another, market competition has intensified, and product prices have fallen, especially the price of large tow carbon fiber has fallen significantly.
These have put pressure on the operation of carbon fiber companies, but the industry as a whole is still in a profitable state. Moreover, from the perspective of long-term market prospects, there is still potential for development in the domestic carbon fiber industry.
The aerospace market demand is stable
The aerospace sector has always been a traditional advantageous application market for carbon fiber and its composite materials in the world.
Weihai Guangwei Composite Materials Co., Ltd. (hereinafter referred to as "Guangwei Composites") is the main supplier of carbon fiber in the aerospace and other fields of mainland China. According to the 2023 financial report released by Guangwei Composites a few days ago, during the reporting period, the company achieved operating income of 2.518 billion yuan, a year-on-year increase of 0.26%, and the net profit attributable to shareholders of listed companies (hereinafter referred to as "attributable net profit") was 873 million yuan, a year-on-year decrease of 6.54%. Among them, the carbon fiber and fabric business of the expanded fiber sector achieved sales revenue of 1.667 billion yuan, a year-on-year increase of 20.28%.
Thanks to the steady growth of demand for aerospace equipment applications, Guangwei Composites' operating income remained stable.
Cartography | Zhong Yanjing
Among them, the sales revenue of aviation business was 1.253 billion yuan, accounting for 49.79% of the company's total revenue, a year-on-year increase of 20.89%, and the sales revenue of aerospace business was 347 million yuan, accounting for 13.79% of the company's total revenue, a year-on-year increase of 37.73%.
In terms of products, in its carbon fiber business, the sales revenue of T300 products, which are mainly traditional stereotyped products, accounted for 51.12%, a slight increase of 2.91% year-on-year, the sales revenue of T800 products, which is mainly based on newly shaped aviation carbon fiber, accounted for 17.2%, a year-on-year increase of 50.61%, and the sales revenue of MJ series, which is mainly based on the application of new stereotyped satellite structures, accounted for 12.39%, a year-on-year increase of 54.45%.
"In the core sector of carbon fiber, the company's traditional shaped fiber products have stable orders and timely delivery, which is still an important cornerstone of the company's performance. Wang Yingchao, secretary of the board of directors of Guangwei Composites, said, "Guangwei Composites is a carbon fiber enterprise with complete carbon fiber varieties and serialization in China, and has been adhering to the development idea of 'developing high-performance products and aiming at high-end applications' for many years. In the face of the adverse impact of the objective environment, the company continued to expand its business in high-end applications, and its operating performance was basically stable. ”
Yin Huiwei, an analyst at Minsheng Securities, said: "The sales of Guangwei Composites' new shaped carbon fiber are growing rapidly. Its new shaped fibers for aerospace and high-performance carbon fibers for industry are gradually entering mass production, and their contribution to the company's performance will continue to increase. The company continues to expand its business, from upstream material supporting to downstream aerospace, low-altitude and other fields, forming an industrial layout with strong synergies, and continuously leading the high-quality development of the industry while continuously enhancing its core competitiveness. ”
However, it is worth noting that the price of shaped carbon fiber has decreased in recent years. Affected by this, Zhongjian Technology Co., Ltd. (hereinafter referred to as "Zhongjian Technology") will make a profit of 247 million yuan to 290 million yuan in 2023, a year-on-year decrease of 51.3%-58.52%.
Zhongjian Technology's ZT7 series carbon fiber has been stable and supplied in batches for many years, and new carbon fibers have also begun to be supplied. However, the short-term decline in profits did not affect its overall development confidence.
Li Jianfeng, secretary of the board of directors of Zhongjian Technology, said: "The company's third phase project is currently in a stable state of continuous production, mainly for the mass production of ZT9H products. ZT9H carbon fiber has been stably supplied to users, initially meeting customer needs and ensuring applications in key areas. With the further expansion of the market, the application of this carbon fiber will be more abundant. ”
In recent years, Zhongfu Shenying Carbon Fiber Co., Ltd. (hereinafter referred to as "Zhongfu Shenying") has continued to make efforts in the fields of commercial aerospace and civil aviation, and its high-performance carbon fiber products have been successfully applied in some large solid launch vehicles. Zhongfu Shenying Shanghai Co., Ltd. carried out research on toughening resin and prepreg process technology improvement, passed the PCD pre-approval of the mass production line, completed the construction of T800 carbon fiber aviation prepreg project, and the prepreg developed passed the AS9100 system certification. In addition, the prepreg workshop has been officially put into use, and it has gradually become a highland for carbon fiber applications.
According to the "2023 Global Carbon Fiber Composite Market Report" (hereinafter referred to as the "Report") newly released by Guangzhou Sail Carbon Fiber Technology Co., Ltd. (hereinafter referred to as "Sail") shows that in 2023, the total global carbon fiber market demand will be 115,000 tons, of which 22,000 tons will be used in the aerospace field, accounting for 19.1%, and 20,000 tons will be used in the field of wind power blades, accounting for 17.4%.
Lin Gang, general manager of Sail, said: "The global carbon fiber application market pattern in 2023 has changed greatly, compared with previous years, the demand of the wind power market is weak, and the demand of the aerospace market has picked up, returning to the 'leading' application position again. ”
Cartography | Zhong Yanjing
The data of the report also shows that in 2023, the total demand for carbon fiber in the mainland will be 69,075 tons, of which 8,000 tons will be used in the aerospace field, accounting for 11.6%. It can be found that the demand for carbon fiber in the continental aerospace field is still 7.5 percentage points lower than the global market, which also means that there is still growth potential for applications in this field.
Supply and demand are changing, and competition is intensifying
According to the data of the report, in 2023, the operating capacity of carbon fiber in mainland China will be 140,830 tons, an increase of 25.7% over 2022, accounting for 47.7% in the world, ranking first in the world, and the share of domestic carbon fiber in the domestic market will reach 76.7%, a record high. This fully reflects the great progress of domestic carbon fiber.
However, on the whole, from last year to the present, the overall supply and demand relationship of the mainland carbon fiber market has changed significantly.
According to the report, in 2023, the mainland carbon fiber market is not optimistic, with demand down 7.2% from 74,429 tons in 2022, while operating capacity increased by 25.7% from 112,050 tons in 2022.
The growth rate of production capacity is greater than the growth rate of demand, which is directly reflected in the decline in product prices. Data from Baichuan Yingfu show that in June last year, the domestic carbon fiber inventory as a whole remained low. In the second half of last year, inventories increased rapidly, from about 4,000 tons in June to about 12,000 tons at the end of the year. The accumulation of products and poor sales have made the price of carbon fiber in 2023 show a unilateral downward trend, and the price will fall from about 160 yuan/kg at the beginning of the year to 100 yuan/kg at the end of the year, and the gross profit margin of the industry will drop sharply in the second half of the year.
The intensification of market competition and the decline in prices have put pressure on the operation of the industry and the operation of enterprises. Judging from the performance data of enterprises, the sales of related business segments of some enterprises have declined, and some enterprises have "increased revenue but not profits".
According to the 2023 financial report recently released by Zhongfu Shenying, during the reporting period, the company achieved operating income of 2.259 billion yuan, a year-on-year increase of 13.25%, and attributable net profit of 318 million yuan, a year-on-year decrease of 47.45%.
"2023 is a year of both challenges and opportunities for the carbon fiber industry. Affected by factors such as production capacity superposition and demand less than expected, industry competition has intensified. Affected by factors such as phased changes in the relationship between supply and demand in the market, the sales price of the company's main products fell and the net profit declined. Zhongfu Shenying said so in the annual report.
In fact, in the face of market pressure, Zhongfu Shenying focuses on strengthening its layout and consolidating and enhancing its core competitiveness.
Jin Liang, secretary of the board of directors of Zhongfu Shenying, said: "In the Lianyungang production base, the company continues to reduce the unit consumption of products, positioning high-end and small batches, diversified products, so that the production and sales of medium and high-modulus products such as T800, M40X, and M46 have been improved. At the Xining production base, with the full release of production capacity, the public system facilities have been promoted to achieve the optimal operation mode, with an annual output of more than 16,000 tons. Through a series of measures to reduce consumption and increase efficiency, the company has reduced the cost of carbon fiber by more than 20%, highlighting the advantages of scale. The company has also done a lot of work in technology, talent, product, management and green development. ”
Jilin Carbon Valley Carbon Fiber Co., Ltd. (hereinafter referred to as "Jilin Carbon Valley") will achieve operating income of 2.049 billion yuan in 2023, a year-on-year decrease of 1.65%, and attributable net profit of 241 million yuan, a year-on-year decrease of 61.72%. "Affected by the complex internal and external environment, the demand for carbon fiber is less than expected, and the price has fallen significantly. Jilin Carbon Valley said in the announcement.
The performance of Guangwei Composites' other business segments was also affected. The sales revenue of the wind power carbon beam business in the energy new materials segment decreased by 35.54% year-on-year, and the sales revenue of the prepreg business in the general new materials segment decreased by 10.52% year-on-year.
"With the continuous expansion of application fields, the demand of the carbon fiber industry in mainland China has maintained stable growth for many years, however, the industry-wide price increase caused by accidental factors has disrupted the normal order of industry development and inhibited the enthusiasm of downstream applications, which has become the main reason for the decline in demand in 2023. The previous price increase triggered the expansion of the supply side. With the continuous release of new production capacity, the relationship between supply and demand has quickly changed, and competition in the industry has intensified. Wang Yingchao said.
Since the beginning of this year, the market has not been optimistic.
According to a report from Baichuan Yingfu, in the first quarter of this year, the domestic carbon fiber market had a bad start. Although many companies have reduced the load of equipment in consideration of shipment pressure, the overall inventory of enterprises continues to be at a high level. Market prices are consolidating at low levels, and corporate profits are compressed.
What will happen to the market in the future? In the short term, it is unlikely that there will be a significant change.
According to Baichuan Yingfu, in the second quarter, the supply and demand of the carbon fiber industry may increase simultaneously, but the inventory in the market is backlogged. Some companies bid for shipments, but because of the pressure on the cost side, the profit margin is limited. It is expected that the domestic carbon fiber price will be low in the second quarter. Taking large tow products as an example, the market transaction price of T300 grade 48K/50K is expected to drop to 60 yuan/kg-70 yuan/kg.
Investment is still active, "eyeing" the future
On the one hand, the market continues to decline, on the other hand, the industry's production capacity continues to increase, and new project investment is still active. In fact, the world's leading carbon fiber companies are also actively expanding their production capacity at this stage.
According to the data of the report, in 2023, the increased production capacity of global carbon fiber companies will mainly include: Zhongfu Shenying will increase by 14,000 tons, Jilin Chemical Fiber Group will increase by 7,000 tons, South Korea's Hyosung Company will increase by 5,500 tons, Turkey's DowAksa will increase by 2,400 tons, Zhongjian Technology will increase by 1,500 tons, and Changsheng (Langfang) Technology Co., Ltd. will increase by 800 tons. Among the top 10 carbon fiber companies in the world, there are four companies in the mainland: Jilin Chemical Fiber Group, Zhongfu Shenying, Xinchuang Carbon Valley Holdings Co., Ltd. and Zhejiang Baojing Carbon Materials Co., Ltd.
For leading enterprises, they firmly implement the established development strategy, implement the expansion plan, and continuously expand the advantages of scale.
The construction of Guangwei composite material Baotou project has entered the preparatory stage before it is put into operation, and it is planned to be put into operation in the first half of this year, with an additional annual production capacity of 4,000 tons. Zhongfu Shenying Lianyungang with an annual output of 30,000 tons of high-performance carbon fiber project will start in April 2023, and the polymerization workshop has been capped and entered the bidding stage for key equipment procurement. The third production line of the third phase of the project is under construction. Jilin Chemical Fiber Group is promoting a project with an annual output of 15,000 tons of high-performance carbon fiber. Zhejiang Baojing Carbon Materials Co., Ltd. is promoting a project with an annual output of 30,000 tons, and the project is expected to be put into operation before 2025. Shanghai Petrochemical's annual output of 6,000 tons of carbon fiber project is expected to be put into operation this year.
At the same time, a new group of investors are also targeting carbon fiber.
In January this year, Shandong Province announced a list of major projects in 2024, including Shandong Yongcheng New Materials Co., Ltd.'s annual output of 12,000 tons of carbon fiber project, and Shandong Jingchang New Material Technology Co., Ltd.'s 120,000 tons/year polyacrylonitrile-based precursor and 60,000 tons/year carbon fiber project. In March this year, Donghua Energy (Maoming) Carbon Fiber Co., Ltd. carried out the first information publicity of the environmental impact assessment of the carbon fiber project with an annual output of 10,000 tons. Hangzhou Heshun Technology Co., Ltd. with an annual output of 350 tons of M-grade (high modulus) carbon fiber and supporting precursor project is expected to start in July this year and be completed in July 2026.
Inner Mongolia Heli Chemical Fiber (Group) Co., Ltd. with an annual output of 200,000 tons of polyacrylonitrile-based precursor and an annual output of 100,000 tons of carbon fiber project is under construction. The project is located in Hainan District, Wuhai City, Inner Mongolia, with a planned total investment of 11.15 billion yuan, divided into three phases of construction, and has completed a total investment of about 800 million yuan, and the first phase is expected to be completed in June this year.
According to the statistics of Baichuan Yingfu, as of the end of March this year, the production capacity of the carbon fiber industry in mainland China officially put into operation reached 127,000 tons, of which 6,800 tons were added in the first quarter, an increase of 33.4% year-on-year and 5.66% month-on-month.
"From Inner Mongolia to Guangdong, from Shandong to Shanxi, from Zhejiang to Gansu, from Shaanxi to Yunnan, carbon fiber project investment is emerging all over the country. Concerns about the development of the industry have also emerged. An industry insider expressed such feelings.
There are reasons for concern. It is clear that market pressures are on the horizon and it remains to be seen how long the downside will last. But it is also obvious that this round of investment enthusiasm is showing a trend of "only increasing, not decreasing".
How to understand this pair of "contradictions"? Perhaps, we should understand from the perspective of "everyone is still optimistic about the long-term development prospects of domestic carbon fiber".
Under the wave of green development, it is foreseeable that with the continuous development of wind power, photovoltaic, hydrogen energy, new energy vehicles and other industries in the mainland, the amount of carbon fiber in wind power blades, carbon carbon composites, pressure vessels, automobiles and other fields will continue to grow in the future.
Li Jianfeng said: "At present, the situation of 'high-end products is still insufficient, mid-end products are not competitive enough, and low-end products are too supplied' in the domestic carbon fiber industry has not been effectively improved. This year, the company will continue to focus on its main business, and actively expand new application fields while ensuring supply. ”
"In recent years, with the progress of domestic carbon fiber technology and capacity expansion, the process of localization substitution has been accelerating, which has led to the emergence of many emerging downstream application scenarios, such as hydrogen energy, wind power, commercial aviation, low-altitude flight and other fields. Jin Liang said, "Zhongfu Shenying will continue to consolidate and enhance its market share in hydrogen energy, photovoltaic and other advantageous fields, expand its application in the field of wind power blades, and continue to increase the application in emerging fields such as electronic 3C and unmanned aerial vehicles. In the next step, the company will continue to provide customers with a rich portfolio of product models, as well as customized products and services to meet the demand for carbon fiber in different emerging fields, further strengthen the coordination of the industrial chain, expand emerging markets, ensure the security of the supply chain, and promote the high-quality development of the industry. ”
Talking about how to advance domestic new materials, Zhang Guoliang, chairman of Zhongfu Shenying, said: "The cost of carbon fiber should be low, so that all walks of life can afford to use, the variety should be more, so that all walks of life can adapt, the performance should be good, to meet the needs of a high level, we must be on par with the world's best carbon fiber." ”
"In 2024, as the new production capacity of general-purpose carbon fiber continues to be released, industry competition may intensify, but the wind power carbon beam business may show recovery growth. For the Baotou project, which is about to be put into production, it may face certain pressure in the short term. Wang Yingchao said, "However, the carbon fiber industry has its inherent development characteristics. We believe the decline in demand is short-lived. As the market returns to rationality, the mainland carbon fiber industry will rely on its own laws to resume development. In the future, the market development of carbon fiber is still improving, and high quality is increasingly becoming a key factor in competition. ”
Written by reporter of this newspaper with Li Na
Editor / Wang Danyang