As a crucial component of coal mining machines, tunneling machines, and rotary drilling rigs, the cutting pick is a product that receives both significant attention and considerable neglect. It receives significant attention because there are hundreds, even thousands, of companies nationwide engaged in the production and sales of cutting picks. The industry is large-scale and well-developed. It receives little attention primarily because cutting picks are considered very "small." Compared to large-scale machinery like coal mining machines and tunneling machines, which often cost hundreds of thousands or even millions of dollars, cutting picks are relatively insignificant.
I reviewed several market research reports but found no market analysis specifically related to cutting picks. Clearly, in the eyes of many research institutions and companies, cutting picks are not considered a market at all.
They are merely an appendage to the mining machinery industry and cannot form their own industry.
Given this, understanding the size of the cutting pick market is not easy. However, it's not impossible; we can verify this through calculations.
Taking mining cutting picks as an example, China's coal production in 2018 was 3.97 billion tons. Due to varying geological conditions, the number of cutting picks consumed per 10,000 tons of coal varies from mine to mine. Let's average it out. If we say that 20 cutting picks are needed for every 10,000 tons of coal, then nearly 4 billion tons of coal would consume approximately 8 million cutting picks.
How much are 8 million cutting picks worth? The price of cutting picks varies, ranging from tens to hundreds of yuan. Using a unit price of 150 yuan per pick, 8 million picks would be worth approximately 1.2 billion yuan. That is, the annual market size for mining cutting picks is about 1.2 billion yuan.
What does 1.2 billion yuan mean? Everyone knows Shanghai Chuangli, a listed company on the main board that manufactures coal mining machines and tunneling machines. Its market capitalization is 6.3 billion yuan. Their annual revenue is only around 1.2 billion yuan.
This is one calculation method. Another method is to extrapolate from the coal mining market. According to the "2018 Annual Report on Coal Industry Development" released by the China Coal Industry Association, there are 5,600 coal mines nationwide.
Let's assume that the average annual purchase amount of cutting picks for a coal mine is 20,000 yuan. That's very low, isn't it? This is calculated using the lowest possible standard. The total annual procurement amount for cutting picks is approximately 1.12 billion yuan, which is basically consistent with the data given above.
It's important to note that this only includes mining cutting picks; engineering cutting picks are not included. Rotary drilling rig cutting picks, crusher cutting picks, rock cutting machine cutting picks, etc., together constitute a considerable market.
Why does such a small cutting pick have such a large market share? The head of Shandong Aide Industrial Co., Ltd. explained: "Coal remains one of the world's main energy sources, which determines the important position of cutting picks as coal and rock cutting tools, and this will not change in the short term." Such a large market size naturally attracts countless prospectors. According to Tianyancha, there are over a thousand cutting pick manufacturers nationwide. In addition to domestic manufacturers, many foreign brands have also entered the Chinese market, successfully occupying a significant portion of the domestic market with high-end, high-price, and high-quality products as their main selling points. This has attracted the attention of many domestic manufacturers, including Shandong Aide.
Shandong Aide is a professional cutting pick manufacturing company that has always been at the forefront of technological research and innovation in China. A technical researcher at Shandong Aide stated, "Competing with imported cutting tools mainly hinges on technological breakthroughs. Only by improving quality can we gain user recognition."
In fact, it's much more than that. I believe the core competitiveness of domestically produced cutting tools lies primarily in their cost-effectiveness. They need to match the quality of imports while offering significantly lower prices. Only by demonstrating this superior cost-effectiveness advantage can domestic cutting tools establish a firm foothold. However, many companies either cannot produce high-quality cutting tools, thus remaining confined to the low-end market, or they price their products too high, resulting in weak brand competitiveness that makes it difficult to compete with imported brands.
The road ahead is long and arduous. Mastering cost-effectiveness is the key to success.
I believe that a cutting tool market worth billions cannot be built by just one or two companies. This market requires the combined support of coal companies, cutting tool manufacturers, distributors, and downstream component suppliers. Sharing prosperity and steady progress, I hope all upstream and downstream manufacturers of cutting tools can work together to improve quality and make the domestic cutting tool market larger, more mature, and more professional.
