Analysis of the Development Prospects and Market Competition Pattern of China's Permanent Ferrite Industry

Future of Power Tools predicts that the market size of electric tools will reach 28.1 billion US dollars in 2016.
2、 Industry competition pattern and degree of marketization
(1) Industry competition pattern
Permanent magnet ferrite production enterprises in countries such as Japan, South Korea, Europe, and America have a high overall technological level and strong product development capabilities. They mainly produce high-performance permanent magnet ferrite and maintain a strong competitive advantage. The main enterprises include TDK from Japan and SsangYong from South Korea. With the transfer of the international manufacturing industry and the improvement of domestic enterprise technology, China's permanent magnet ferrite industry has gradually narrowed the gap with advanced foreign levels, and its international competitiveness has significantly increased. The main representative enterprises include Hengdian Dongci, Jiangfen Magnetic Materials, and the issuer. The market competitiveness of the permanent magnet ferrite industry in emerging industrialized countries, represented by China, continues to strengthen.
(2) Marketization level
In 1995, China's production of permanent magnet ferrite surpassed Japan, becoming the world's largest producer. According to statistics, as of the end of 2012, there were more than 210 enterprises engaged in the production of permanent ferrite in China. Among them, the production of wet pressed permanent magnet ferrite tiles increased from less than 100000 tons in 2005 to 230000 tons in 2015. Hengdian Dongci, Jiangfen Magnetic Materials, and the issuer are major domestic production enterprises. At present, the concentration of the industry is still relatively low. There are about 60 wet pressed permanent magnet ferrite tile production enterprises in China, with many enterprises with an annual production capacity of 3000 tons or less. The specific distribution is as follows:
3、 Industry barriers
① Qualification barriers
High performance permanent ferrite wet pressed magnetic tiles are mainly used in the fields of automobiles, motorcycles, DC variable frequency household appliances, electric tools, etc. They have high requirements for product consistency, stability, and supply scale, with high entry barriers and long certification cycles.
Wet pressed magnetic tile suppliers need to obtain the corresponding international quality management system certification. If they are matched with automotive motors, they need to pass the ISO/TS16949 quality system certification commonly used in the international automotive industry, and undergo strict on-site evaluations by customers (covering production processes, process specifications, quality management, technical research and development, environmental protection, etc.) in order to obtain admission qualifications.
After obtaining the qualification of a qualified supplier and establishing a cooperative relationship, customers usually do not easily change suppliers to ensure product quality and maintain supply stability. This strict supplier qualification certification, as well as stable customer relationships formed based on long-term cooperation, creates a high qualification barrier for prospective companies.
② Technical barriers
High precision motors require high uniformity and consistency of wet pressed permanent magnet ferrite tiles. Uneven magnetic properties will lead to uneven magnetic fields in the motor, increased torque fluctuations, increased output voltage ripple of the generator, decreased linearity, and reduced precision indicators for controlling the motor; The magnetic properties of wet pressed permanent magnet ferrite tiles of the same brand are inconsistent in different batches, sometimes resulting in batches of unqualified motors. Therefore, high-precision motors require the uniformity and consistency of the magnetic properties of the product to be controlled within a very small range of error.
Permanent magnet ferrite is a technology intensive industry, and mastering key technologies such as raw material formulation, mold forming, and magnetic circuit optimization requires long-term experience accumulation. High end applications often require high residual magnetic induction strength Br and intrinsic coercivity Hcj, with representative applications being automotive motors, DC variable frequency motors, etc. With the continuous upgrading of downstream customer products, the requirements for magnetic properties and accuracy of permanent ferrite products are becoming increasingly high, and the technical barriers are also increasing.
③ Customized barriers
The personalized demand for permanent magnet ferrite products from downstream customers is increasing. Different customers have different requirements for the magnetic properties, form and position tolerances, and mechanical and physical properties of the products. Therefore, the industry has the characteristics of personalized and non-standard customization. Enterprises need to continuously improve their process technology level to quickly meet customer requirements.
4、 Industry business model and profit model
Guided by customer needs: Wet pressed permanent magnet ferrite tiles are generally non-standard components, and production enterprises in the industry design and customize them according to the technical specifications and parameters provided by customers. Global renowned motor companies have put forward high requirements for the research and development strength, technical level, personnel quality, supply experience, process management, and quality control of suppliers of permanent magnet ferrite wet pressed magnetic tiles. Production enterprises in the industry can only enter the high-end market and enhance product profitability by meeting the certification and licensing requirements of high-end customers.
Based on technological development, the main indicators for measuring the technical level of wet pressure permanent magnet ferrite tiles include magnetic performance, dimensional accuracy, and product consistency. Production enterprises in the industry can only continuously improve product quality and meet downstream customers' needs for product updates and replacements based on technological development. In addition, through technological development, production processes can be continuously improved to enhance product yield, reduce production costs, and improve the profitability of enterprises.
Order based production: Permanent ferrite wet pressed magnetic tile production enterprises generally determine production based on sales and organize production according to orders. On the one hand, enterprises need to establish stable cooperative relationships with raw material suppliers to ensure timely and stable supply of raw materials; On the other hand, organize production according to orders, strengthen inventory management, reduce warehousing costs and related business risks.