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Abstract In developed countries, cemented carbide tools have become the dominant choice in the tool market, now making up around 70% of the total. Meanwhile, high-speed steel tools are gradually declining at a rate of 1% to 2% annually, with their current share dropping below 30%. Superhard tools such as diamond and cubic boron nitride account for roughly 3% of the market. This trend reflects the global shift toward more efficient and durable cutting solutions.
In China’s domestic hardware manufacturing industry, the proportion of cemented carbide tools has surpassed 50%, yet the supply-demand structure remains severely imbalanced. As a result, many surplus high-speed steel tools are sold at low prices, either domestically or internationally, while high-performance cemented carbide tools must be imported in large quantities. Imports of these tools rose from $900 million in 2001 to $4.5 billion by 2005, highlighting the growing dependency on foreign suppliers.
According to Luo Baihui, secretary general of the International Model Association, China’s annual tool sales amount to 14.5 billion yuan, but the share of cemented carbide tools is still less than 25%. This not only lags behind the international market structure but also fails to meet the increasing demand from domestic industries for advanced cutting tools.
China currently produces about 80,000 tons of high-speed steel, accounting for nearly 40% of the world’s total output. However, this massive production consumes significant amounts of critical resources like tungsten and molybdenum. The overproduction and lack of innovation have led to a surplus of low-value high-speed steel tools, which are sold at a loss, reducing profit margins for many manufacturers.
On the other hand, China’s annual output of cemented carbide is 16,000 tons, also representing approximately 40% of global production. Yet, the most valuable part—cutting inserts—only reaches 3,000 tons, or 20% of the total. This imbalance results in an insufficient supply of essential carbide tools while precious raw materials remain underutilized.
Economically, China’s cemented carbide sales reach about $560 million annually. In contrast, Japan produces only 40% of China’s volume but generates $2.633 billion in revenue, with 72% of that coming from cutting blades. This demonstrates the importance of focusing on high-value products and optimizing resource utilization. Chinese tool manufacturers can learn from this model to improve efficiency and profitability.
Currently, the key issue lies in the mismatch between production and demand. For instance, there is a high demand for carbide cutters, but too much high-speed steel is being produced. Similarly, modern manufacturing requires high-efficiency tools, yet the market is flooded with low-grade standard cutters. Addressing this structural imbalance is crucial for the long-term development of China’s tool industry.