Abrasives Industry Development Direction 2016

China's economic policy becomes more distinct in 2016, including the development direction of the abrasives industry. Overcapacity has become the bottleneck in industry upgrading and strategic emerging industry development. According to the latest statistics, from January to September 2015, brown fused alumina output totaled around 960,000 tons, white fused alumina output was about 170,000 tons, black silicon carbide was 300,000 tons, green silicon carbide was 75,000 tons, resin bonded abrasives was 350,000 tons, and vitrified abrasives was 180,000 tons. It is revealed that China's abrasives capacity utilization rate is much lower than conventional international standards. Improving abundant capacity is an essential task for abrasives industry. Innovation in new products development, new technologies, new materials, and new techniques are extremely important.

Survival of the fittest

In recent years, with rapid development in various industries, China's abrasives industry has been driven. But some problems exposed during its development. Large amount of capital has been invested in the abrasives industry under the increasing market demand. As a result, the abrasives industry is packed with homogeneous competition. Last year, sluggish market in steel, shipbuilding, and photovoltaic industry led to weak demand for abrasives and abrasives products. Many abrasives companies confronted serious overstock problems. Overcapacity has hindered the development of companies, industry structure adjustment, and smooth operation of market economy.

In order to realize sustainable development of the abrasives industry, strategies need to be taken to prevent and relieve overcapacity. As an emerging industry, superhard materials and super abrasives should avoid repeating the same mistake. Meanwhile, technological innovation should be enhanced to improve competitive force.

Innovation enhances upgrading

A distinctive feature of China's overcapacity is the coexistence of production overcapacity and structural overcapacity. Take the abrasives industry for example, the market is packed with low-end products but insufficient of high-end products. An essential method to solve overcapacity is innovation, including technological innovation, product development, organizational innovation, and new market development. On one hand, abrasives companies are required to improve efficient supply and create practical demand by seeking breakthroughs from technological development and new product launch. On the other hand, the Chinese government shall further enhance companies technology transform and provide support for projects with market demand.

Environmental protection facilitates sustainable development

The rapid development of economy has added pressure on environmental problems, such as water pollution and air pollution. As a universally recognized high energy consuming and high pollution industry, abrasives industry has problems in abrasives  smelting. Currently, the problem mainly exists in brown fused alumina. With the implementation of energy saving and emission reduction policy, some small brown fused alumina factories will be closed, and small power smelting furnace will be eliminated.