An Inside Look at the Chinese Forging Industry

7/26/2019 An Inside Look at the Chinese Forging Industry

1/524 April 2016

The State of Chinas Forging IndustryThe forging sector in China has made remarkable progress since

1978. Currently, the annual output of functional forgings reaches

11 million tons, occupying 39% of global production. Taking

steel balls, hand tools, medical devices and standard components

into account, the production increases to 16.5 million tons. With

roughly 400,000 employees, China is the largest global producer of

forgings with the most complete forging capacity.

Due to market and government pressure, Chinas forging

industry is striving to produce forgings with higher precision,

higher efficiency, more pervasive digitalization, lighter weight and

lower energy consumption. Many excellent achievements have been

seen in forging-machinery R&D and manufacturing, application of

simulation, IT application and especially precision forging.

In certain fields, such as nuclear-power and automotive, select

forgings from China have been the leader among global peers.

Chinas forging producers are exploring overseas markets and

increasing exports every year.

Similar to its global counterparts, this industry is facing a

shortage of technical engineers and laborers, especially young

workers. In fact, the problem is more serious due to rapid economic

expansion in China. Forging robots and automation have been a

highlight and a new investment trend in the past three years.

Most Chinese forging companies are small- and medium-

sized, and their bargaining position is weak compared with

strong upstream material suppliers and downstream users. Even

the sharp steel price decreases in recent years were deducted by

the users. The automobile industry is a case in point. Following

Volkswagen China in April 2015, every manufacturer dropped

prices by 5-15% to reduce inventory. As a result, automobileproduction may maintain slight growth, but general profit

decreases sharply along the whole chain.

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 Chinas 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

An Inside Look

at the ChineseForging IndustryZhang Jin Confederation of Chinese

Metalforming Industry; China

We are privileged to bring you three exclusive

essays written by the secretary general of the

Confederation of Chinese Metalforming Industry

(CCMI). These editorials deal with the current

Chinese forging industry, where it is headed and

its drive toward achieving advanced

manufacturing status.

This highly automated forging line is one of Chinas most advanced.


2/526 April 2016

more industry consolidation is necessary.

The former can afford huge investment for the best machinery,automation, tooling and heat treatment, as well as good welfare

for employees. Leaders of the latter companies usually a poorly

educated first-generation founder would not be able to face

poor conditions as well as before. Worse is that their children

dont want to be part of this noisy, tiresome and dirty business.

Competition will be fierce, and cooperation will continue to be

difficult among forgers.

Work is still needed in the following areas: equipment research

and capability, reliability, productivity per worker, businessmanagement and marketing. The bad economic conditions force

forging companies to pay more attention to management and

marketing to reduce cost and increase profit.

Chinas forging companies started from a very low point, and

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

An Inside Look at the Chinese Forging Industry

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April 2016 27

has increased significantly and Chinas real tax

burden is higher than any other country, its very

difficult to sell lower-priced forgings.

It is also very difficult for China-produced

forgings to enter the supply chain for Japaneseand Korean cars. The true reason is not related

to technology, price and quality. It is basically an

undisguised technology or market barrier.

CCMI will organize ChinaForge Fair twice

in 2016. It will be held June 2-5 in Dongguan,

Guangdong province, to serve South China and

Sept. 21-24 in Beijing to serve North China.

This fair will showcase and introduce the

latest technologies, business management and

products to help Chinese forging companies

better compete globally.

Automation, IntelligentManufacturing in Chinas Die-Forging IndustryAutomation in Chinas die-forging industry

began in the 1970s. It aimed to reduce labor

intensity, enhance productivity and improve the

quality of forgings. Instead of effectively reducing labor cost, however, automated

manufacturing seriously affected productivity and profit due to its unstableperformance. The huge investment didnt bring obvious benefits. That was why

automation was not popular before 2000.

Chinese die forging steadily grew through the 1990s. During that decade,

automobile production increased to 2 million from 1 million. From 2000 to 2009,

production took a great leap forward to 13.7 million.

The forging industry is less attractive to workers who were born in the 1980s

and 1990s. Companies in east China must pay each worker $8,000-15,000 per year

Forge-shop overview Courtesy of Chongqing Qingling Forging Co., Ltd.

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Greenleafs ceramic inserts have been used to machine steel rolls for years. In fact, ceramic

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4/528 April 2016

(including salary, tax, insurance, etc.) on average. Even so, they

could not keep the young workers long enough.

Due to increasing salaries and strict quality demands, die-

forging companies must turn to automation. According to

incomplete statistics, 30-40% of die forgings are produced onautomatic/semiautomatic lines or single integrated automatic

presses. It is estimated that fully automatic lines occupy less than

3% of all the forging lines in China, but the rate is increasing.

The current problem is that many forging orders are of multiple

varieties and small batches, which means it is more economical

and reliable to continue to use human power than automation.

Meanwhile, forging automation is more and more reliable

thanks to mobile information technology (IT) and big-data

technology. In addition, the Chinese government and industry

organizations are encouraging the application of automation and

intelligent manufacturing.

In 2015, the Chinese forging industry faced its worst crisiswith excess capacity and over-competition, and about 50% of

companies were under deficit. Automation in die forging is still

in the initial stage in China, and many forging companies are

considering increasing their competitiveness with this new method.

I have the following opinions on automation and intelligent

manufacturing:

For the moment, a lot of forging companies are evaluating

the cost and benefit of automation. It is more complex and

expensive than many forging owners expected because the

order, product structure, die, press, etc. have to be modified to

implement automation. Even so, I believe that real investment

will boom after the Chinese economy rebounds.

For some top companies, automation is not nearly enough

to enter the international market. Intelligent manufacturing

is a higher-level production method. It is a complete turnkey

solution, and intelligence is fully applied in each link of

the whole process chain. Leading companies are currently

preparing for intelligent manufacturing.

To realize intelligent manufacturing in die forging, it is

necessary to collect, analyze and use vast production and

technology data. German and Japanese companies are doing

this well. CCMI is cooperating with some domestic private

companies to use this technology. Modern management technology and methods, such as

mobile IT and modern management software, must be

involved in intelligent die-forging production.

The key point is high-quality labor, especially workers born

after 1980 with higher education. Environment and facilities

must adapt to workers safety demands, behavior habits and

culture ideology.

CCMI is one of the active participants and promoters of this

great process. The yearly MetalForm China exhibition and various

activities, monthly seminars and conferences are perfect ways

to promote new technology and push the progress of intelligentproduction forward.

Chinas Forging Industry: Moving ForwardFrom 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.


Heat Treating in ChinaArlen Luo Editor, Industrial Heating China

Since the 1980s, the automotive, mechanical equipment,aerospace and aviation, rail transit, wind power and

nuclear power industries in China have developed rapidly,

as has demand for the necessary assemblies and basic parts that

feed these industries.

Meanwhile, the existing stock of heat-treat equipment in

China is comparatively backward and badly in need of upgrade.

Motivated by energy conservation, consumption reduction,

environmental protection and cost reduction, the way forward

for heat treatment in China is to focus on developing a

specialized and networked commercial heat-treating industry.

In total, there are more than 10,000 heat-treat facilities in

China, about 3,000 of which are privately held commercial

facilities. Most of the 300 largest are inthe Yangtze River Delta (e.g., Shanghai,

Zhejiang province, Jiangsu province) and Pearl River Delta (e.g.,

Guangdong province).

Additionally, priority will be given to the development

of advanced processes such as step isothermal quenching,

intensive quenching, gas nitrocarburizing, ion nitriding, sealed

multipurpose furnaces and high-pressure gas-quenching (HPGQ)

vacuum furnaces.

I believe that there will be more and more professionalized

and networked heat treaters and well-known companies in China

in the coming years.

Arlen Luo can be reached at [email protected]


5/530 April 2016


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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, includ-

ing 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 globalcompetitiveness. 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 energyconsumption.

In 2011, the Confederation of

Chinese Metalforming Industry (CCMI)

organized over 100 experts to write the

China Forging Industry Technology

Roadmap, which proposed the

following:

By 2020, the output of cold/warm

precise forgings should reach at least

12% of closed-die forgings.

Accuracy should reach to grade 7 or

higher from the current grade 5. Energy consumption for producing

each ton of forgings shall be reduced

by 10% (compared with the unit

energy consumption of 0.44 ton of

standard coal equivalent per ton

forging in 2011).

Material utilization shall rise 3-5%.

Manufacturing costs of each part shall

drop 20%.

Annual output per employee shall

increase 30%. In 2011, the output was

65.64 kg per hour per forge operator.

In 2013, CCMI was finally able to

publish a book series entitled Forging

Technologies after three years of work.

This series systematically summarizes

forging theories and technologies of

process and equipment.

Chinas forging industry also has

several unique technologies. These

include roll forging front beams;

producing camshafts and large bearing

balls with cross-wedge rolling technology;

and integrated forming technology for

high-precision forgings.

In general, Chinas forging industry is

progressing in the direction of providing

complete solutions that integrate materials

technology, forming technology and post-

processing.

Author Zhang Jin is the Secretary

General of the Confederation of Chinese

Metalforming Industry. He can be reachedat [email protected].

Documents

An Inside Look at the Chinese Forging Industry