Power Plant Boiler Industry Status And Development Trend Analysis

Development of the industry status quomay lead to falling product prices, once demand
1. The industry size and production capacity hasgrowth can not compensate for the losses
improved rapidly. In recent years, driven bycaused by price decline, the industry may face
strong demand for power generation equipment,revenue, lower profit level of a double dilemma.
the power plant boiler industry ushered in anIndustry Development Trend Analysis
unprecedented opportunity for development, has1. Macro economic complex and uncertain trends.
made considerable progress. According to branchChina's economy since 1990, continued to maintain
of statistics, at present the industry total assetsa 10% or more period of growth appears twice:
reached 64.1 billion yuan, in 2001 13.7 billion yuan,once from 1992 to 1996 China's high economic
4.7 times more. In the industry has expandedgrowth, the 1997 financial crisis, lasted six years
rapidly and at the same time, production capacityof deflation, for when the market decline, orders
has increased dramatically. With the highest pointfor a small state, industries and enterprises should
of the historical value of production compared tobe very deep memory; the other one was from
total industrial output value (current prices) 4502003 to 2007, the five year growth. But last year
billion yuan in 2001 5.3 billion to 8.5 fold. Powerthe sub prime crisis triggered by the global
plant boiler output of 97.543 million kilowatts, infinancial turmoil has begun to transfer to the real
2001 11.73 million kilowatts of 8.3 times. China'seconomy, the United States, Japan, and European
annual output of power generating equipmenteconomies contraction in 30 years at the same
accounted for about 50% of world production,time, international demand has plummeted, while
power generation equipment to the global netthe yuan appreciation, rising production costs, such
amount of the contribution rate of 50% or more,as the superposition of a number of factors led
has become the world's largest power plant boilerto China's exports was faced with unprecedented
manufacturer.pressure. The global financial crisis triggered the
2. The full realization of objectives of productpossibility of a recession is increasing, all of which
upgrades. More than 10 years ago, 30 kw thermalimpact on how much China's economy is indeed
power units still need to import. By the end ofworthy of our attention.
2007, 30 million kilowatts, 600,000 kilowatts and2. Power generation equipment market growth
above grade units, respectively of the totalrate obviously slowed down. National power
installed capacity of 50.15% and 21.53%. Accordinggeneration capacity in 1987, following a
to branch of statistics, in 2008 the first threebreakthrough 100 million kilowatts, nearly five
quarters, completed a total of 70.783 millionyears, a continuous realization of 400 million
kilowatts power plant boiler, 30 million, 600kilowatts and 5 million kilowatts, 600 million
thousand kilowatts or above grade boilerskilowatts, 700 million kilowatts across the four
accounted for 24.6% and 51.7%, supercritical,major landmark is expected in late 2008 early
ultra supercritical thermal power generating units2009 would breaking 800 million kilowatts.
have been promoted to the main machine type.According to the National Bureau of Statistics data
As of the end of September 2008, hasshow that although the annual growth in output of
accumulated production for 60 million kilowattpower generating equipment, but the growth rate
supercritical, ultra supercritical boilers 186 units, ofof the inflection point has already emerged from
which: 600 thousand kilowatts rating supercriticalthe 92.9% growth rate in 2004 dropped to 2007,
boiler 150 units, 600,000 kilowatts class ultra11.1% in first three quarters of 2008, output of
supercritical boilers 15 units, 1 million kilowatts Ultrapower generating equipment 97.8248 million
supercritical boiler 21 units (10 units have been putkilowatts , down by 4.3% (and in August for the
into operation). In digesting imported technology,first time a negative growth rate of growth).
based on independent innovation has developed aState Electricity Regulatory Commission issued
super critical, ultra critical and large scale circulatingthe "2008 National Electric Power Industry 1 9
fluidized bed boilers. Currently, supercritical, ultramonths Monthly Bulletin of Statistics" shows that
supercritical boiler technology has reached thein September 2008 GDP growth rate of 9.9%,
international advanced level and become theelectricity generation increased by only 9.7%,
world's most widely used large scale circulatingwhich is nearly 10 years, the first time increase in
fluidized bed boilers country.generating capacity lower than the GDP growth
3. The ability to participate in internationalsituation. China's energy consumption elasticity
competition, notably enhanced. As the size andcoefficient (energy consumption growth rate and
strength of the industry, "by leaps and bounds,economic growth rate ratio) has been less than 1
super normal" development, to participate inin (1997 Southeast Asian financial crisis broke out,
international competition, rapidly climbing the scalethis figure is less than 1).
and speed. According to branch of statistics, inJudging from the current situation, as the state's
2007 the industry exported goods worth 3.0 billionmacro control policies strengthened ,2008 2010,
to complete the first time to break the 900 millionChina's GDP growth rates slow down the
yuan of the historical record. The completion ofinevitable, if the GDP grew at 9% and power
the first three quarters of 2008 the industrygeneration equipment and GDP elasticity
exported goods worth 4 billion yuan, an increasecoefficient of 1.15 basis, to consider "big pressure
of 168%. In particular, independent innovation,small "eliminating backward production capacity
600,000 kilowatts of supercritical boilers, havefactors, power generation capacity is expected in
been achieved to India, Russia, Turkey and other2010 will reach 947 million kilowatts, more than
countries exports, marking the Chinese powerthe United States as the world's first (with an
plant boiler design and manufacturing standardsannual increase in installed capacity of about 78
have entered the ranks of the world's advanced.million kilowatts). Then in 2020, China's total
According to China Machinery and Electronicinstalled capacity goal is to much? Development
Products Import and Export Chamber ofand Reform Commission data is 12.5 million
Commerce statistics, in 2007 the signing ofkilowatts, the power system forecast is 1.5 billion
300,000 kilowatts of new coal fired power stationkilowatts, if calculated according to 1.5 billion
contract in 31 sets of 600,000 kilowatts coal firedkilowatts installed capacity, ie 2010 to 2020, 10
power station 15 sets a new contract totalyears approximately 553 million kilowatts installed
installed capacity reached 20 million kilowatts, thecapacity added in accordance with countries to
contract amounted to 15 billion U.S. dollars. Firstoptimize their the development of coal power,
half of 2008, overseas investment projects forand vigorously develop hydropower, nuclear
the 87 electric power to coordinate the amountpower, construction, appropriately develop natural
of up to 22.9 billion U.S. dollars, of which 44 billiongas power generation, encourage renewable
dollar project, the amount of some 206 billion U.S.energy and new energy power generation of
dollars. The new contracts signed during the firststructural adjustment the main line, the estimated
half amounted to 9.2 billion U.S. dollars, India's first,average annual market new thermal power
to 7.38 billion U.S. dollars, Pakistan, second, to 11.2installed capacity of 4,300 kilowatts. New installed
billion U.S. dollars, Vietnam, Malaysia, Turkey closecapacity of the chain the next few years may be
behind. The new power equipment exporta negative growth, power generation equipment,
contracts signed over the past year, largewill enter a cycle of downward phase. At present,
capacity coal fired power plants has become athe overall capacity of power plant boiler industry
"going out" of the locomotive.at 90 million kilowatts or so, subsequent market
4. The industry is expected to benefit and highcompetition will become more intense.
speed development is not achieved simultaneously3. Overseas markets and not easy to be overly
increased. By the electricity market demand,optimistic. From the international electricity market
industry enterprises, which have remained high,situation shows that in recent years the pace of
the size and ability to rapidly increase, but by thedevelopment has accelerated noticeably. India,
raw materials, component parts to resourceIndonesia, Vietnam, Malaysia and other Southeast
constraints, the price rise, shortage of productionAsian countries, the demand for electricity have
capacity within the enterprise, subcontracting andmultiplied, but their lack of capacity of power
other factors outside the Association increasedequipment, mainly rely on imports; Africa's vast
the impact of power plant boiler Manufacturingand growing electricity market in South America,
costs rose sharply, the industry of rapid growth,the recovery of the electricity market for China's
did not achieve the expected benefits of theexports of electrical equipment brought with them
simultaneous growth, particularly in the last twoopportunities . To develop the international
years, a marked decline in industry profits.electricity market is a developing trend, but many
According to branch of statistics, in 2002 theoverseas projects uncertainty, so that we are still
industry overall losses since 2004 with thenot enough to open up overseas markets to
dramatic increase in production, industry profitmake overly optimistic judgments. According to
levels increased by leaps and bounds. Totalthe analysis, the current international market,
industry profit is the highest level in history ineven in the face a seller's market, but to
2006 to 26 billion in 2007 fell by 38%. Thestrengthen the favorable international market
maximum value of the historical cost profit forshare only in 3 5 years time. Increase in the
2004 of 12%, followed by 2 percentage pointsproportion of overseas orders may increase the
per year decline in 2007, fell to 4.18%, higher thanimplementation of the risk and reduce profit
in 2002 only 1 percentage point. The first threemargins. In Indonesia, for example, in mid 2006 to
quarters of 2008, the industry total profits of 1.62the first half of 2008, signed the contract price
billion yuan, down by 21%, cost 5.7% profitper kilowatt increase only 30%. This reflects the
margin, down 2.2 percentage points. Since theawareness and ability to enterprise bargaining
third quarter, although the price of steel and othergroups still need to be improved. This requires us
raw materials dropped from a high point, but theto bring the international market bigger, do a good
average price is still high, but the impact of steeljob, we should also actively explore the
prices on the gross profit margin of at least a sixperspective from the business community
month time lag, so the apparent rebound in grosstowards the reduction of losses and improve the
profit margin power generation equipment haveoverall export price level of power plant boiler.
to wait for the second half of 2009 .4. The industry potential risks can not be ignored.
At the same time, raw material prices fall tooAt present, industries and enterprises can be
fast and too the trend, but also make us worriedprotected while in hand orders for 3 4 years of
about the future development of the industry,stable income, but the downstream power
macro economic decline and economic recession ingeneration companies to improve cash flow
the background gives us the rapid growth ofsignificantly less likely, order the quality of cause
demand can not place overly optimistic forecasts,for concern, it might even cause delay in delivery
while the rapid decline in The raw material costsof the unfavorable situation.