With its low specific gravity and high specific strength, titanium alloys have been widely used in the aerospace industry in recent years because of their significance in improving the thrust-to-weight ratio of aircraft. In addition to the military and aerospace fields, titanium alloys are also used in chemical, metallurgical, medical, sports and leisure fields.
Global titanium consumption is closely related to the development of the aerospace industry. Since 2000, China's titanium demand has been mainly concentrated in the low-end petrochemical sector. The amount of titanium used in the aerospace sector will continue to rise. For military titanium, due to the special nature of the military industry, it is subject to the supervision of the National Defense Bureau of Science and Industry, which adopts a strict administrative licensing system and has more stringent requirements for product quality, with higher requirements in terms of "high uniformity, high purity and high stability" of titanium materials. According to the company's annual report and titanium industry development report, the company's titanium production in 2020 will be 4877/4139 tons, with a market share of about 26.5% (taking the average of the two disclosure calibers). We believe that although the proportion of high-end titanium used in aerospace, shipbuilding, and marine engineering in China has been optimized in recent years, the proportion of high-end titanium used is still low compared to the global demand structure for titanium, and there is plenty of room for future growth.
China's "14th Five-Year Plan" and military modernization construction from 2021 onwards formally entered the acceleration period, aerospace, military equipment and other high-end fields with titanium significantly increased, the total output of titanium in China in 2020 is 97,000 tons, an increase of 28.9% year-on-year. From the product composition, the plate is the main product, production reached 57,000 tons, an increase of 47.5% year-on-year, accounting for 59.4% of the output of titanium materials. From the supply structure, China's titanium manufacturing enterprises show a situation of more than one strong. Although China's high-end titanium manufacturing capacity in recent years, still can not fully meet the strong demand for downstream military titanium, part of the titanium still need to import from Ukraine, Kazakhstan, and other countries. 2020 China's total imports of titanium amounted to 6139 tons, of which the technical requirements of thin titanium plate, sheet, strip perennial net imports, net imports of 1,997 tons in 2020, an increase of 9.5% over 2019. 9.5%.
