Superalloys, recognized as the "crown jewel" of advanced metal material systems, serve as the core load-bearing material in critical sectors such as aero-engines, gas turbines, and nuclear power equipment, with their performance directly determining the thrust, efficiency, and lifespan of high-end machinery. In recent years, driven by the "Two Engine Major Projects," the batch production of the domestic C919 passenger aircraft, breakthroughs in gas turbine localization, and the "Dual Carbon" strategy, China's superalloy industry chain has entered an accelerated phase. As aero-engine upgrades and installations progress, alongside the intensive commissioning of gas turbine and nuclear power projects, industry prosperity is set for a sustained upward trajectory. The focus should be on the core supply chains for aero-engines and gas turbines, maintaining an "Overweight" industry investment rating.
Superalloys, as essential materials for extreme environments above 600°C, are widely used in high-end manufacturing fields like aerospace and energy power due to their excellent oxidation resistance, creep resistance, and hot corrosion resistance. Classified by base element, nickel-based alloys (operating temperatures exceeding 1000°C) dominate the market with an 80% demand share, supplemented by iron-based (600-850°C) and cobalt-based (approximately 950°C) alloys. Regarding forming processes, wrought superalloys account for 75% (2024), while cast and powder alloys are used for high-performance components like turbine blades. Within the industry chain, nickel is the primary raw material (40% cost share); midstream processing involves casting, deformation, and powder metallurgy; downstream aerospace demand constitutes over 50% of the total, representing 40%-60% of the weight in advanced aero-engines and directly determining their performance level.
On the demand side, the industry has experienced explosive growth across multiple sectors, with production increasing from 19,000 tons in 2017 to 49,000 tons in 2023 (CAGR 17.1%), and demand rising from 21,000 tons to 52,000 tons (CAGR 16.8%), gradually narrowing the supply-demand gap. Production for 2024 is projected to reach 57,000 tons (YoY +16.3%), with aerospace (55%) and power generation (20%) being the core demand areas. Long-term, factors such as aero-engine upgrades and installations, the localization of commercial aircraft, and breakthroughs in gas turbines are expected to drive average annual demand beyond 56,500 tons from 2025 to 2030, with gas turbines, aviation, and automotive sectors being the primary growth drivers.
On the supply side, capacity expansion and import substitution are accelerating simultaneously. The global superalloy market size is expected to exceed $30 billion by 2025 (CAGR 8.5%), while China's market is projected to reach 120 billion yuan, having grown at over 15% annually in the past five years. Domestic capacity continues to be released, with total capacity expected to surpass 60,000 tons by 2025, although a 30% supply gap for high-end products remains. The localization rate has increased from less than 40% in 2020 to approximately 65% in 2025; supported by the "14th Five-Year Plan" policies, a distinct pattern of "concentration at both ends, diversity in the middle" has emerged in the industry chain: upstream is dominated by special steel enterprises like Fushun Special Steel, the midstream casting and forging segments are highly competitive, and downstream OEMs are increasing their outsourcing ratios through a "small core, large collaboration" model.
The competitive landscape is characterized by high technological barriers creating strong moats, with leading companies spearheading industry upgrades. The sector is expected to maintain an average annual growth rate of 15% from 2025 to 2027, and the import substitution rate is forecast to rise from 32% in 2020 to 80% by 2027. Leading firms have achieved breakthroughs in niche segments: Western Superconducting's superalloy business revenue grew 56.68% year-on-year in H1 2025, Sunward Intelligent's cast superalloy gross margin reached 39.4%, and CISRI's revenue for the first three quarters increased 10.7% to 2.804 billion yuan.
Risk factors include potential delays in technology validation progress, extended OEM certification cycles, fluctuations in raw material prices, adjustments to the pace of military aircraft and gas turbine projects, and uncertainties regarding funding and policy support.
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