sales@dropforging.netA Review of Chinese Forging Industry
As one of the main metalworking process, China forging industry has achieved remarkable progress in the past 40 years. Currently, the annual output of Chinese forgings have reached 11 million tons, occupying 39% of global forging production. There are totally 420,000 employees working for forging companies in China, making China the largest global producer of forgings with the most complete forging capacity.
To ensure sustainable development and be more competitive, each forging company in China works hard to produce forgings with higher precision, higher efficiency, but lower production cost.
In certain fields, such as nuclear-power and automotive, it has been a trend that sourcing forgings from China. So more and more forging companies turn to their business to overseas market, especially Eourpean and American markets.
Like Chinese others' industries, the lack of forging technical engineers and workers is getting more serious caused by the rapid econimic expansion in China. To relieve this problem, so some Chinese forging companies like Fly Forge have gradually invested some automatic production lines to ensure normal production.
Most Chinese forging companies are small- and medium-sized. High costs of forging machinery and low profits have hindered technological updating and innovation in the past four years. Moreover, stricter requirements from the government on energy saving, lightweighting and environmental protection add a heavy burden. Since the depression began in 2011, many producers are struggling to survive or grow because production capacity for normal product far exceeds real demand.
Although China’s forging industry has built up a complete production chain and mastered many forging technologies, the biggest difference compared with advanced countries is the huge gap between the best forging companies and the rest, which means more industry consolidation is necessary.
To solve this problem, Fly Forge has invested the best closed die forging machinery, automation, tooling and heat treatment, as well as good welfare for employees.
China’s forging companies started from a very low point, but they are still struggling for equal payment for equal quality, even domestically. Producers are usually required to sell the forgings 10-20% cheaper than overseas counterparts. Since labor cost has increased significantly and China’s real tax burden is higher than any other country, it’s very difficult to sell lower-priced forgings.
From 2000 to 2011, the machinery manufacturing industry in China increased annually by at least 15%. For example, automobile production was 2.07 million in 2000, and it was 23.72 million in 2014, with automobile forgings amounting to 4.98 million tons in 2014. Both the owners and employees of forging companies benefited significantly during that golden decade.
The Chinese economy has become weaker since 2012. However, it is widely anticipated that it will rebound in 2016. Forging companies are facing consecutive years of profit downturn and increasing labor costs, even in the midst of the roaring automobile forging sector.
Before 2011, forging companies devoted exclusive attention to enhancing output and were proud of being able to domestically produce a new forging that substituted for imported goods. Forgers are now more practical and realistic and are focusing on profit and cash flow because account receivables are really high and dangerous in the industrial chain.
The output of forgings in China amounted to about 10 million tons in 2013, including 6.4 million tons of closed-die forgings and 3.6 million tons of open-die forgings. Many companies own advanced and complete forging lines and technologies with global competitiveness. Meanwhile, too many friction screw presses (>400 ton, more than 8,900 sets) and drop hammers (>650 sets) are still in operation. We are glad to see that new investment is focused mainly on high-level machinery and automation with higher efficiency and lower energy consumption.
In general, China’s forging industry is progressing in the direction of providing complete solutions that integrate materials technology, forming technology and post-processing.
To ensure sustainable development and be more competitive, each forging company in China works hard to produce forgings with higher precision, higher efficiency, but lower production cost.
In certain fields, such as nuclear-power and automotive, it has been a trend that sourcing forgings from China. So more and more forging companies turn to their business to overseas market, especially Eourpean and American markets.
Like Chinese others' industries, the lack of forging technical engineers and workers is getting more serious caused by the rapid econimic expansion in China. To relieve this problem, so some Chinese forging companies like Fly Forge have gradually invested some automatic production lines to ensure normal production.
Most Chinese forging companies are small- and medium-sized. High costs of forging machinery and low profits have hindered technological updating and innovation in the past four years. Moreover, stricter requirements from the government on energy saving, lightweighting and environmental protection add a heavy burden. Since the depression began in 2011, many producers are struggling to survive or grow because production capacity for normal product far exceeds real demand.
Although China’s forging industry has built up a complete production chain and mastered many forging technologies, the biggest difference compared with advanced countries is the huge gap between the best forging companies and the rest, which means more industry consolidation is necessary.
To solve this problem, Fly Forge has invested the best closed die forging machinery, automation, tooling and heat treatment, as well as good welfare for employees.
China’s forging companies started from a very low point, but they are still struggling for equal payment for equal quality, even domestically. Producers are usually required to sell the forgings 10-20% cheaper than overseas counterparts. Since labor cost has increased significantly and China’s real tax burden is higher than any other country, it’s very difficult to sell lower-priced forgings.
China’s Forging Industry: Moving Forward
From 2000 to 2011, the machinery manufacturing industry in China increased annually by at least 15%. For example, automobile production was 2.07 million in 2000, and it was 23.72 million in 2014, with automobile forgings amounting to 4.98 million tons in 2014. Both the owners and employees of forging companies benefited significantly during that golden decade.
The Chinese economy has become weaker since 2012. However, it is widely anticipated that it will rebound in 2016. Forging companies are facing consecutive years of profit downturn and increasing labor costs, even in the midst of the roaring automobile forging sector.
Before 2011, forging companies devoted exclusive attention to enhancing output and were proud of being able to domestically produce a new forging that substituted for imported goods. Forgers are now more practical and realistic and are focusing on profit and cash flow because account receivables are really high and dangerous in the industrial chain.
The output of forgings in China amounted to about 10 million tons in 2013, including 6.4 million tons of closed-die forgings and 3.6 million tons of open-die forgings. Many companies own advanced and complete forging lines and technologies with global competitiveness. Meanwhile, too many friction screw presses (>400 ton, more than 8,900 sets) and drop hammers (>650 sets) are still in operation. We are glad to see that new investment is focused mainly on high-level machinery and automation with higher efficiency and lower energy consumption.
In general, China’s forging industry is progressing in the direction of providing complete solutions that integrate materials technology, forming technology and post-processing.