High Manganese Steel Industry

Source: Intellectual Research Consulting-Industry Research

summary:showed a steady growth trend. The market price was affected by the price fluctuation of upstream iron ore and manganese ore raw materials, and the industry price also showed a certain fluctuation trend. However, the overall demand of the industry scale increased. Data show that the market scale of high manganese steel in China reached 2.098 billion yuan in 2023, a small decrease from 2022, with mining, metallurgy and construction machinery accounting for about 60%. From the perspective of supply and demand, in 2023, China's high manganese steel production and demand were 380000 tons and 348100 tons.

1.

high manganese steel refers to the alloy steel with manganese content of more than 10%. High manganese steel, commonly known as "wear-resistant steel", is widely used in many wear-resistant parts in various industries. The original hardness of high manganese steel is very low, and the work hardening ability is very strong. In use, the hardness increases, the faster the deformation speed, the significant hardening effect, and the higher the hardness. High manganese steel can be divided into wear-resistant steel and non-magnetic steel according to different uses. Wear-resistant steel is mainly characterized by high carbon and high manganese content, such as ZGMn13 series, with carbon content between 0.90-1.50 and manganese content as high as 10.0-15.0. It is mainly used to make parts that withstand high impact and high wear, such as shovel teeth of excavators, crusher parts, etc. In contrast, non-magnetic steel focuses on high manganese content and low carbon content, manganese content is greater than 17%, carbon content is generally less than 1.0, mainly used in the manufacture of non-magnetic structural materials, such as transformers, electromagnets and so on. Two types of high manganese steel in the chemical composition and use of each focus, wear-resistant steel emphasis on wear resistance and mechanical strength, and non-magnetic steel is to focus on its non-magnetic and in the application of electromagnetic equipment.

2. industry business model

1) Procurement mode

high manganese steel is mainly iron ore, manganese ore and other mining resources and related fuel resources, etc., the procurement mode of large-scale iron and steel integrated enterprises is mostly price comparison procurement, that is, on the basis of market research to develop the highest procurement price, through comprehensive price comparison, combined with supplier management to determine suppliers for procurement. For some procurement varieties, some enterprises will also combine the market situation and material characteristics, through bidding or bargaining procurement. For the procurement of raw fuels closely related to daily production and operation, enterprises generally sign a relatively long-term supply agreement with the supplier to adjust the settlement price according to market changes; for the more important iron ore supply, large iron and steel integrated enterprises also lock resources by investing in shares, so as to reduce the risk of price fluctuation in the upstream of the industry.

2) Production mode

large-scale iron and steel integrated enterprises have a full set of production processes from ironmaking, steelmaking to steel rolling, and adopt the batch production mode of determining sales by efficiency and production by sales. Based on the annual plan of the enterprise, the monthly, weekly and daily production operation plan is prepared according to the product sales contract and various internal and external information. Small high manganese steel related production enterprises customer demand stability is poor, enterprises directly adopt the production mode of demand, high flexibility and market adaptability, can customize products according to customer needs, to meet the diversified needs of the market.

3) Sales model

large steel conglomerates mostly use a combination of distributor distribution and direct supply to end-users for product sales, with distributor distribution accounting for a relatively high proportion, mainly because steel production capacity is spread across the country, sales differences between regions are low, and local distributors have the advantage of adaptability. The distributor shall sign an agreement with the enterprise on an annual basis to specify the amount of resources in each year. The customer shall submit a demand plan to the enterprise on a monthly basis according to the amount of resources determined in the agreement. The enterprise shall sign a supply contract with the customer according to the plan and the current production situation. The customer shall prepay all the payment before signing the formal contract. After the contract is signed, the enterprise will organize the production and deliver the goods according to the contract, settlement with customers at the end of each month based on actual shipments. Small-scale high-manganese steel-related production enterprises are mostly concentrated in a province or a region, with high regional characteristics, and the sales model is mainly direct sales.

4) R & D model

tend to adopt a systematic and forward-looking R & D model, through industry-university-research cooperation, international cooperation and other ways, in-depth exploration of new materials, new processes and new applications of high manganese steel, and strive to make breakthroughs in technological innovation and industrial upgrading. On the other hand, small high manganese steel-related enterprises pay more attention to practicality and the ability to respond quickly to the market, flexibly adjust the direction of research and development by introducing, digesting, absorbing and re-innovating, and cooperating with large enterprises or scientific research institutions. quickly transform new technologies into productivity to meet the needs of specific markets.

3. Industry Policy

The policy background of China's high manganese steel industry presents a diversified development trend, aiming to promote the high-quality development of the industry, green transformation and efficient use of resources. In recent years, the National Development and Reform Commission, the Ministry of Industry and Information Technology and other departments have successively issued a series of policy documents to clarify energy efficiency benchmarks and benchmark levels, strengthen energy efficiency guidance and constraints, and guide enterprises to implement energy conservation and carbon reduction reforms. At the same time, the construction of intelligent manufacturing standard system in the steel industry has been put on the agenda, aiming to solve the problem of lack of standards and promote the quality, efficiency and power change of the industry. In terms of environmental protection, documents such as the opinions on comprehensively promoting the Construction of a Beautiful China require key industries to implement ultra-low emission transformation, promote clean energy substitution, and control the total amount of coal consumption. In addition, accelerating the transformation and upgrading of traditional manufacturing industries and building a waste recycling system have also been included in the policy agenda, aiming to promote resource recycling and industrial coupling development, and realize the cascade utilization of energy resources and industrial recycling.

4. Industry

the development of China's high manganese steel industry has experienced four stages from the start to the deepening. In the initial stage, the industry mainly relies on traditional process production, which is used in the manufacture of simple wear-resistant parts. With the progress of science and technology and economic development, the growing high manganese steel industry adopts modern continuous casting and rolling process, which significantly improves the production efficiency and product quality, broadens the application field, and gradually increases the domestic production capacity and output. Entering the outbreak period, the increased investment in national infrastructure construction has led to a surge in demand for high manganese steel, fierce competition in the industry, and brand building and market expansion have become important strategies for enterprises. In recent years, in the deepening period, the high-quality development trend of downstream demand and the strict requirements of policies on environmental protection have prompted the high-manganese steel industry to pay attention to green production and sustainable development, and promoted the green transformation of the industry. At the same time, domestic high-manganese steel-related research has been significantly improved. Industry innovation and environmental awareness have been widely recognized, bringing new development opportunities for the industry.

5. industry is at risk.

1) Macroeconomic and cyclical risks

high manganese steel products belong to steel products, which are greatly affected by downstream automobile, infrastructure and other demand, have a strong cyclical nature, and are closely related to macroeconomic growth rate and fixed asset investment growth rate. At the same time, under the premise that steel production capacity is relatively fixed in the short term, the fluctuation of steel demand will have a significant impact on steel prices, and the fluctuation of steel prices will make the profitability of enterprises in the industry fluctuate.

2) Policy risk

In recent years, the relevant policies of the high manganese steel industry have focused on environmental protection and high-quality development, aiming to promote the high-quality development of the casting and forging industry, strictly distinguish between different production processes, and avoid illegal new production capacity and illegal production. At the same time, the environmental protection requirements of the iron and steel industry are increasingly strict, requiring enterprises to take green production and sustainable development measures. For the high manganese steel industry, it not only brings the opportunity of transformation and upgrading, but also brings the challenge of compliance operation and cost control.

3) Market competition risk

Compared with the United States, Japan and other developed countries, there are a large number of iron and steel enterprises in China, and there is a certain homogenization of industry products, which leads to intensified market competition in the industry. In recent years, the pace of mergers and acquisitions in China's iron and steel industry has accelerated, and some large iron and steel enterprises are or plan to greatly enhance their comprehensive strength through mergers and reorganizations. If enterprises in the industry can not continuously optimize product structure, improve technical level and enhance comprehensive competitiveness, they may be at a disadvantage in the fierce market competition.

4) Raw material risk

high manganese steel depends on a variety of alloy elements, such as iron, manganese, chromium, nickel, etc., as well as fuel energy and related production equipment. The price of raw materials is affected by many factors such as international market supply and demand, production costs, exchange rate changes, etc. Taking iron ore and manganese ore as an example, my country's iron ore and manganese ore import dependence is nearly 80%. As the international trade situation continues to change, energy value and strategic significance increase, industry volatility increases. Specifically, the rise in the prices of raw materials such as iron ore and manganese ore will directly increase the production cost of high manganese steel and reduce the profitability of enterprises, while unstable supply may lead to production interruption and affect the normal operation of enterprises.

5) Global Political Risks

the change of international political pattern, the rise of trade protectionism and geopolitical conflicts may lead to the increase of uncertainty in the international trade environment, which will affect the cost of upstream manganese ore and fuel, and also affect the import and export trade of high manganese steel products. In addition, global political risks may also lead to exchange rate fluctuations, affecting the international competitiveness of enterprises, high manganese steel enterprises need to pay close attention to international political dynamics, strengthen international cooperation, optimize supply chain management, improve the international competitiveness of products, in order to reduce the negative impact of global political risks.

6. industry chain

high manganese steel industry are iron ore, manganese ore and other raw materials and mining machinery, and the supply of upstream raw materials has a direct and significant impact on the profitability of the high manganese steel industry. The prices of major raw materials such as iron ore and manganese ore will directly affect the production cost of high-manganese steel, and the quality level of raw materials such as iron ore will also affect the quality of products in the industry, thereby affecting its sales and market recognition; The middle reaches are mainly the production and manufacturing of high-manganese steel, which mainly include small high-manganese steel-related enterprises and large-scale steel enterprises according to the scale and type of enterprises; downstream metallurgical machinery, mining machinery, construction machinery, rail transit, automobile and other industries are the direct application fields of high manganese steel. With the rapid development of these fields, the demand for high manganese steel will also increase accordingly. At the same time, the upgrading of products in these fields will also put forward higher requirements for high manganese steel.

7. development status

High manganese steel is widely used in the manufacture of wear-resistant castings under impact wear conditions, such as ball mill liner, crusher tooth plate, rolling mortar wall, crusher hammer, excavator shovel teeth, etc. Due to the different working conditions, the impact and wear strength of high manganese steel are different. In many occasions, the traditional high manganese steel often can not give full play to its impact wear resistance characteristics. It is worth noting that in recent years, the domestic ultra-low temperature high manganese steel as LNG storage tank material has been recognized, further expanding the application of high manganese steel, the future or will become an important driving force for the rapid growth of high manganese steel. At present, the supply and demand of high manganese steel industry in the high manganese steel market is showing a steady growth trend. The market price is affected by the price fluctuation of upstream iron ore and manganese ore raw materials, and the industry price also shows a certain fluctuation trend. However, the overall demand of the industry scale is increasing. Specific data show that the market scale of high manganese steel in China is 2.189 billion yuan in 2022 and 2.098 billion yuan in 2023, of which mining, metallurgy and construction machinery account for about 60%, in 2022, China's high manganese steel production and demand were 38.24 and 351600 tons, with the terminal infrastructure and other market demand fluctuations, China's high manganese steel production and demand in 2023 decreased slightly to 380000 tons and 348100 tons, respectively. Globally, China is the world's largest high-manganese steel production area, with annual output accounting for about 20% of the world's total output. In 2014, the global high-manganese steel output was 1.478 million tons, in 2022, the global high-manganese steel output was about 1.758 million tons, and in 2023, the output dropped to 1.703 million tons.

10. development trend

China's high manganese steel industry is ushering in a new period of vigorous development, in the innovation and expansion of application areas, LNG field deep penetration, lightweight and environmental protection and other trends continue to improve. In terms of segmentation, China's high-manganese steel industry has developed a new generation of high-performance high-manganese steel/alloys with ultra-high strength and plastic toughness through the innovation of preparation methods and composition systems to meet the needs of special service environments. At the same time, the penetration of high manganese steel in the LNG field is becoming more and more significant, and its excellent performance makes it a key material for LNG storage and transportation facilities, and with the expansion of the clean energy market, it is expected to become one of the mainstream materials of LNG in the world. In terms of lightweight, the industry actively adopts advanced technology and design to achieve product weight reduction while maintaining performance to meet the needs of high-end manufacturing. In terms of environmental protection, enterprises introduce environmental protection technology, reduce energy consumption and emissions, and develop environmentally friendly products to meet the market demand for green materials.