China's laser cutting equipment market size reached CNY 26.6 billion in 2019, but the growth is slowing down.
In the past few years, China's laser cutting equipment market has become the leading one, with the continuous decline in the prices of core components such as cutting heads, lasers and control systems and the continuous improvement of the technology and brand marketing.
The market penetration rate continues to increase. Laser cutting is gradually replacing traditional processes such as punches, shears and shearing machine tools in metal forming machine tools. The industry is ushering in a period of rapid development, answering rising demand.
In 2018, the market size of China's laser cutting equipment industry reached CNY 24.3 billion, with a year-on-year increase of 26.56%. From 2014 to 2018, the compound annual growth rate (CAGR) of China's laser cutting equipment industry reached 23.09%, becoming one of the fastest-growing industries in China's real economy.
In 2019, the price of lasers, the core components of laser cutting equipment, continued to drop, further reducing the cost and the market demand was further released. However, The risk of policy volatility caused by trade friction and the adverse effects of intensified industry homogenization competition, the domestic demand for laser cutting equipment has slowed down significantly, and the demand in some fields such as automobiles and 3C has shown a downward trend. In 2019, China's laser cutting equipment market size was CNY 26.6 billion. The growth rate dropped to 9.47%.
Market competition is fierce, and the price of laser cutting equipment has dropped significantly
At present, there are more than 1,000 laser cutting equipment manufacturers in China. After years of market competition and enterprise development, Han's Laser (SZ:002008), HGTech (SZ:000988), Chutian Laser, etc. have become outstanding brands.
In 2019, the price of upstream lasers dropped sharply, and the demand for downstream automobiles and 3C decreased. Laser equipment companies in the midstream faced huge market competition pressure. Some laser equipment companies did not hesitate to join the price war to increase sales volume. The market is chaotic. At present, the market competition for low- and medium-power (below 4000W) laser cutting equipment has become fierce.
The price of low- and medium-power laser cutting machines has been as low as CNY 120 thousand per 1000W, and the price of high-power laser cutting machines is about CNY 150 thousand per 1000W.
The vicious competition not only led to the sluggish production of laser cutting machines, shrinking many companies' profit margins, and the slow return of laser cutting industry, etc., but also caused the development of the industry to a certain extent. Under this circumstance, companies such as Sunshine Laser (SZ:300227), Bodor Laser, HSG Laser, G WEIKE and others have achieved double growth in scale and profits by expanding product structures, developing high-end markets, and exploring overseas markets.
Laser cutting industry application market pattern
China's laser cutting equipment is widely used in the terminal industry. At present, laser cutting is mainly used in industrial material processing and the communication and memory industry, accounting for 45% and 28% respectively, followed by medical beauty and scientific research and military manufacturing, accounting for 9% and 7% respectively. In the downstream industry of laser cutting equipment, low and medium power laser cutting equipment is used in cabinets, hardware products, electronics industry, household appliances and kitchen utensils etc. and high-power laser cutting is mainly used in rail locomotives and shipping industries, automotive components, heavy machinery, oil pipelines, construction industry, etc. At present, fiber laser cutting has become a market trend in the general metal processing industry.
The regional distribution of China's laser cutting industry
Laser cutting enterprises are mainly concentrated in economically developed provinces and cities such as Hubei, Shandong, Jiangsu, Shanghai and Guangdong. Now China has basically formed four major laser industry groups with the above provinces and cities as the main body, distributed across four regions: Central China, the Bohai Economic Rim, the Yangtze River Delta, and Pearl River Delta. Four major regions of laser cutting equipment manufacturers account for about 90% of the total domestic market share.