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In developed countries, cemented carbide tools have become the dominant choice in the tooling market, making up approximately 70% of the total. Meanwhile, high-speed steel tools are gradually declining, with a yearly reduction of 1% to 2%, and their current share has dropped below 30%. Superhard tools, such as diamond and cubic boron nitride, account for roughly 3% of the market. This shift reflects the growing demand for more durable and efficient cutting solutions in advanced manufacturing sectors.
In China’s domestic hardware manufacturing industry, the use of cemented carbide tools has exceeded 50% of the total tool consumption. However, this has led to a significant mismatch between supply and demand. As a result, a large number of high-speed steel tools are being sold at low prices—either domestically or abroad—while high-performance cemented carbide tools are heavily imported. The import volume increased dramatically from $900 million in 2001 to $4.5 billion by 2005. According to Luo Baihui, secretary general of the International Model Association, China's annual tool sales amount to around 14.5 billion yuan, but cemented carbide tools make up less than 25% of that. This is far from the global market structure and fails to meet the rising demand for advanced cutting tools within the country.
China currently produces about 80,000 tons of high-speed steel annually, which accounts for nearly 40% of the world's total output. This production consumes significant amounts of rare resources like tungsten and molybdenum. The excessive and repetitive expansion in this sector has led to a surplus of high-speed steel tools, forcing manufacturers to sell them at low margins, which negatively impacts their profitability.
On the other hand, China’s annual production of cemented carbide reaches 16,000 tons, also representing about 40% of global output. However, the portion of high-value cutting inserts remains low, at only 3,000 tons, or 20% of total production. This imbalance leads to an insufficient supply of essential carbide tools while valuable raw materials remain underutilized.
Economically, China's cemented carbide sales reach around $560 million per year. In contrast, Japan, which produces only 40% of China's output, generates $2.633 billion in sales, with over 72% of its revenue coming from cutting blades. This demonstrates how effective resource utilization can lead to higher profitability and better performance. China’s tool industry could learn valuable lessons from this model.
Currently, the main issue lies in the structural imbalance of the tool market. There is a clear mismatch between what is produced and what is needed. For example, there is a high demand for carbide cutters, yet high-speed steel cutters are overproduced. Similarly, modern manufacturing requires high-efficiency tools, but the market is flooded with low-grade, standard cutters instead. Addressing this imbalance is crucial for the sustainable development of China's tool industry.