The market size of medium and high voltage inverters has maintained rapid growth in the last four years, and the growth rate has surpassed that of low voltage inverters. Since 2006, the compound growth rate of the market scale has reached 32%, and the compound growth rate of installed capacity has reached 48%. Behind the rapid growth, there are favorable factors in time. First of all, the country vigorously called for energy conservation and emission reduction. In November 2007, the Ministry of Finance issued the Interim Measures for the Management of Energy-saving Technical Renovation Fiscal Incentive Funds. The central government will use the 200 yuan and 250 yuan in the central and western regions will be rewarded.
In addition, the 4 trillion economic stimulus plan has launched a number of large-scale infrastructure projects, driving the demand for frequency converters. Followed by geographical advantages, the financial crisis directly led to foreign companies to reduce investment, which formed a good external conditions for local companies to break through, and domestic brands quickly seized the market with local advantages to ensure the growth of market size. However, we have found that favorable factors may develop in the opposite direction in the short term. The medium and high voltage frequency converters are mainly project-oriented markets. The strategy for large-scale projects has a strong government color in China. The national policy directly determines the degree of prosperity of the industry, and the RMB 4 trillion stimulation plan has stimulated demand, but once the stimulus plan exits, the downstream demand There is a risk of decline. In addition, the emergence of domestic brands is booming and the price war is imminent. If production companies do not possess key technologies, they will lose market share in the competition.
Analysis of future market capacity of major downstream industries In 2009, the medium- and high-voltage inverter market was concentrated in the power, metallurgy, petrochemical, and building materials industries, accounting for 78% of the total demand. We believe that in the foreseeable future, the main demand side of medium and high voltage inverters will remain in these four industries.
Power Industry. In general, 300,000 KW thermal power units need to be equipped with one booster fan, two primary fans, two induced draft fans, two condensation pumps, two circulating pumps, two feed pumps, four exhaust fans, and a mortar pump. Two, two blowers, a total of 19 auxiliary engines, with a power of approximately 30,000 kilowatts. 600 MW thermal power unit needs 1 booster fan, 2 primary fans, 2 induced draft fans, 2 condensation pumps, 2 circulation pumps, 2 feed pumps, 4 powder blowers, 3 mortar pumps, and blower Two, a total of 20 auxiliary engines, with a total power of about 60000 kilowatts.
Therefore, we roughly believe that the potential demand for power inverters is one-tenth of the installed capacity of thermal power. As of the end of 2009, China's thermal power installed capacity was 650.05 million kilowatts, theoretically the market capacity of inverters was 65.2 million kilowatts, taking into consideration 50% of the motor is suitable for speed regulation. In fact, the capacity of medium and high-voltage inverters in the power industry is about 32.6 million kilowatts. According to the price of 800 yuan/kilowatt, the market capacity is about 26.08 billion yuan. In 2009, the frequency converter market for the power industry was 1.8 billion yuan, and the frequency conversion rate was very low. Therefore, we believe that in the next few years, the frequency inverter demand of power companies will still dominate.
Metallurgical industry. Taking iron and steel as an example, the iron and steel industry has large equipment capacity, and over 70% of them are large-scale high-voltage motors. The demand for medium and high-voltage inverters is relatively large. From the survey conducted by the National Development and Reform Commission last year, the application of high-voltage inverters in the metallurgical industry is not widespread, only in some cases. Key enterprises, such as Baosteel and Wuhan Iron and Steel, have applied in large-scale enterprises, and some medium-sized or local steel mills have few. According to our calculations, the potential demand for high-voltage inverters in the steel industry is at least 11.347 million kilowatts. Calculated at a price of 800 yuan/kilowatt, the market capacity is at least 9.078 billion yuan. With the demand of the non-ferrous metal industry, we expect the market capacity of the metallurgical industry to have 15 billion yuan. In 2009, the market scale of the metallurgical industry inverter was 920 million yuan.
Petrochemical industry. Most of China's oilfields do not have strong self-injection capabilities like foreign oilfields. They must rely on water injection to press oil into wells, rely on submersible pumps to collect oil downhole, pump oils out of pumping units, and then rely on oil pumps to transfer oil. The oil pressure output in the pipe, the oil industry requires the application of high-voltage inverter motor is mainly submersible pumps, injection pumps, oil pumps, natural gas compressors, etc., accounting for more than 80% of the electricity consumption in the industry.
In addition, the 4 trillion economic stimulus plan has launched a number of large-scale infrastructure projects, driving the demand for frequency converters. Followed by geographical advantages, the financial crisis directly led to foreign companies to reduce investment, which formed a good external conditions for local companies to break through, and domestic brands quickly seized the market with local advantages to ensure the growth of market size. However, we have found that favorable factors may develop in the opposite direction in the short term. The medium and high voltage frequency converters are mainly project-oriented markets. The strategy for large-scale projects has a strong government color in China. The national policy directly determines the degree of prosperity of the industry, and the RMB 4 trillion stimulation plan has stimulated demand, but once the stimulus plan exits, the downstream demand There is a risk of decline. In addition, the emergence of domestic brands is booming and the price war is imminent. If production companies do not possess key technologies, they will lose market share in the competition.
Analysis of future market capacity of major downstream industries In 2009, the medium- and high-voltage inverter market was concentrated in the power, metallurgy, petrochemical, and building materials industries, accounting for 78% of the total demand. We believe that in the foreseeable future, the main demand side of medium and high voltage inverters will remain in these four industries.
Power Industry. In general, 300,000 KW thermal power units need to be equipped with one booster fan, two primary fans, two induced draft fans, two condensation pumps, two circulating pumps, two feed pumps, four exhaust fans, and a mortar pump. Two, two blowers, a total of 19 auxiliary engines, with a power of approximately 30,000 kilowatts. 600 MW thermal power unit needs 1 booster fan, 2 primary fans, 2 induced draft fans, 2 condensation pumps, 2 circulation pumps, 2 feed pumps, 4 powder blowers, 3 mortar pumps, and blower Two, a total of 20 auxiliary engines, with a total power of about 60000 kilowatts.
Therefore, we roughly believe that the potential demand for power inverters is one-tenth of the installed capacity of thermal power. As of the end of 2009, China's thermal power installed capacity was 650.05 million kilowatts, theoretically the market capacity of inverters was 65.2 million kilowatts, taking into consideration 50% of the motor is suitable for speed regulation. In fact, the capacity of medium and high-voltage inverters in the power industry is about 32.6 million kilowatts. According to the price of 800 yuan/kilowatt, the market capacity is about 26.08 billion yuan. In 2009, the frequency converter market for the power industry was 1.8 billion yuan, and the frequency conversion rate was very low. Therefore, we believe that in the next few years, the frequency inverter demand of power companies will still dominate.
Metallurgical industry. Taking iron and steel as an example, the iron and steel industry has large equipment capacity, and over 70% of them are large-scale high-voltage motors. The demand for medium and high-voltage inverters is relatively large. From the survey conducted by the National Development and Reform Commission last year, the application of high-voltage inverters in the metallurgical industry is not widespread, only in some cases. Key enterprises, such as Baosteel and Wuhan Iron and Steel, have applied in large-scale enterprises, and some medium-sized or local steel mills have few. According to our calculations, the potential demand for high-voltage inverters in the steel industry is at least 11.347 million kilowatts. Calculated at a price of 800 yuan/kilowatt, the market capacity is at least 9.078 billion yuan. With the demand of the non-ferrous metal industry, we expect the market capacity of the metallurgical industry to have 15 billion yuan. In 2009, the market scale of the metallurgical industry inverter was 920 million yuan.
Petrochemical industry. Most of China's oilfields do not have strong self-injection capabilities like foreign oilfields. They must rely on water injection to press oil into wells, rely on submersible pumps to collect oil downhole, pump oils out of pumping units, and then rely on oil pumps to transfer oil. The oil pressure output in the pipe, the oil industry requires the application of high-voltage inverter motor is mainly submersible pumps, injection pumps, oil pumps, natural gas compressors, etc., accounting for more than 80% of the electricity consumption in the industry.
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