New material industry booming in China

Updated: 2011-10-14 11:30
Counter: 20

On September 7, the first China International Advanced Material Industry Expo was held. Gao Yunhu, deputy director of the Raw Material Department of the Ministry of Industry and Information Technology, said that during the 12th Five-year Plan, the gross output value of China's new materials industry is expected to reach RMB 2,000 billion Yuan, with an average annual growth of more than 25 percent, the comprehensive support ability of new materials products will increase to 70 percent, and the support ability of key new materials will increase to 50 percent.

People in the industry suggest that strong policy support will propel the new material industry into a golden stage of development.

With favorable policies, investment opportunities exist across the industry

Graphene, lithium battery separator, rare earth permanent magnet, polyimide, biodegradable materials?? these are names that have caused turbulence in the capital market. With the promulgation of the Development Plan of the New Material Industry in 12th Five-year Plan around the corner, these words are again attracting attention from the market.

It is told that during the 12th Five-year Plan period, 30 types of key new materials will be promoted, 10 major demonstration application projects will be implemented, 10 comprehensive leading enterprises with an output of more than RMB 15 billion Yuan and more than 20 professional companies with an output of over RMB 5 billion Yuan will be established, and several outstanding and well-equipped new material industry bases and industrial clusters with an annual output of more than RMB 30 billion Yuan would be set up. High-strength light-weight alloy materials, high-performance steel materials, functional film materials, new battery materials, carbon fiber composite materials, and rare earth functional materials will receive major support. Meanwhile, ten key projects would be implemented, including the high-strength light-weight alloys specialized project, the high-performance steel specialized project, and the rare earth and rare metal functional materials specialized projects.

Strong government support will undoubtedly bring huge development opportunities for public companies involved in this field.

Take rare earth functional materials as an example. Besides the NdFeB rare earth magnet materials that the market is familiar with, new rare earth materials include many branches, including glowing materials, polishing materials, and catalytic materials. The downstream application fields of these materials cover a wide range of industries, such as automobile, medicine, electric power, agriculture, and new energies. 

"If we use resources effectively, rare earth functional materials will certainly become a sunrise industry". Industry experts believe that, besides permanent magnet material which has the largest industrial volume currently, any material produced using the intrinsic properties of the rare earth or using the changes of the valence state of the rare earth would be the key R&D direction of the rare earth functional materials in the next stage. For example, the price and profit margin of fluorescent powder used in LED are much higher than that of fluorescent powder used in energy-saving lamps, while the quantity needed of the former is only 10 percent of the latter. In the future, energy-saving lamps will be widely replaced by LED .

Let's look at high-performance steel materials. Market participants believe that R&D of new types and in new fields and steel products with high technology threshold and high added value will be a sustainable breakthrough point in the steel sector in the future.

It is learned that the installed production capacity of POM in China has reached 290,000 tons, with an operation rate of only one third in 2010. Currently, there are still numerous projects being planned or under construction. When these projects are completed, the production capacity will be doubled. However, these projects under construction can produce only low- to mid-end products. When they are put into production, they may have significant negative impact on the industry. In this regard, on the Chemical New Materials Development Seminar held recently, Zhou Zhuye, vice chairman of China Petroleum and Chemical Industry Association, said that we should increase the entry threshold of low- to mid-end products so as to reduce the risk of overcapacity.

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