Guohai Securities: Global Dual-Engine Boom Resonance, High-Temperature Alloys Welcome New Opportunities

Guohai Securities released a research report stating that global demand for aircraft engines and gas turbines is rising sharply. OEM orders are full, and deliveries are accelerating, driving demand for core components such as chrome salts, high-temperature alloys, and parts. As the supply chain continues to shift to China, domestic high-temperature alloy export opportunities are emerging, maintaining a “Recommended” rating for the high-temperature alloy industry. It is advised to focus on companies related to materials, high-temperature alloys, and aircraft components.

Guohai Securities’ main points are as follows:

High-temperature alloys are key specialty materials for aerospace and other high-end equipment.

There are three main types: iron-based, nickel-based, and cobalt-based high-temperature alloys, with nickel-based accounting for the largest share (80%). They can be classified by process into deformation, casting, and powder types. The downstream industry chain mainly includes aircraft engines, gas turbines, and aerospace, with expansion into power, automotive, and nuclear industries. Market demand is continuously growing. It is expected that from 2024 to 2028, global demand for high-temperature alloys in aerospace and gas turbines will grow at a compound annual rate of 20%, reaching 450,000 tons by 2026. In terms of capacity, major global companies are expected to have a combined capacity of about 367,000 tons by 2025 (excluding small and medium-sized factories). Companies with clear expansion plans include Carpenter and ATI, each with an additional 9,000 tons of capacity expected to be operational by late 2027.

AIDC is driving explosive growth in gas turbine demand, rapidly boosting high-temperature alloy needs.

The application of AI large models has significantly increased electricity demand, with data center energy consumption rising rapidly. Natural gas power generation has become an important energy source due to its cost and reliability advantages. Global gas turbine sales are expected to rise sharply from 2024, reaching 71 GW in 2025. Leading manufacturers like GE, Mitsubishi, and Siemens have full order books, and capacity expansion is expected to accelerate. By 2028, global gas turbine sales are projected to exceed 130 GW, with a market size surpassing $70 billion. High-temperature alloys are the core materials for hot-end components such as turbine blades in gas turbines and will benefit significantly from increased installation and upgrade demands.

Global aircraft engine deliveries are accelerating, entering a high-growth cycle.

According to IATA, as of 2024, the average age of commercial aircraft worldwide has reached 14.8 years, with overhaul cycles approaching. Coupled with the recovery in passenger turnover and record-high passenger load factors, demand for new aircraft deliveries is driven. The firm estimates that the global annual market for commercial engines is about $100.1 billion, with narrow-body engines averaging around $54.2 billion and wide-body engines about $45.9 billion annually. High-temperature alloys account for 47% of aircraft engine weight, mainly used in hot-end components like turbine blades and disks, directly benefiting from increased engine capacity and renewal needs.

Commercial space creates new demand drivers, with high-temperature alloys supporting extreme environment operation of spacecraft.

Benefiting from capital, policy, and technological support, commercial space is entering a rapid development phase, with ground equipment and satellite services markets exceeding $100 billion. In 2025, global rocket launches are expected to reach a record 330, driven by satellite internet infrastructure development. High-temperature alloys are critical materials for rockets and spacecraft operating in extreme environments, mainly used in engine hot-end components, load-bearing structures, fasteners, and thermal protection systems, deeply benefiting from the demands of the space era.

Risk warnings:

• The expansion of aircraft engine capacity may fall short of expectations.
• Downstream demand fluctuations.
• Raw material price volatility.
• Technological iteration and product substitution risks.
• Intensified market competition.
• Policy and environmental regulation risks.
• Focus on companies’ performance below expectations.