Get What You Pay For
June 1, 2008
Though diamond tools offer longer tool life and greater long-term productivity, end-users often don't look beyond the higher price tag.
Industrial diamond can be defined in two ways: natural diamond that does not meet the standards of gem diamond because of color, size or other imperfections; or diamond that is synthetically manufactured for industrial applications. In 2007, over 90% of all industrial diamond use was synthetic.
A diamond tool uses embedded particles of industrial diamond in the cutting edge, which increases both product performance and the life of the tool. Types of tools include saw blades, wire saws, grinding wheels, drill bits, gang saws, core drills, band saw blades and dressers.
Brazed tools are manufactured through the bonding of two materials by means of a metal alloy with a lower melting point. The two pieces of material are bonded together by a heating and cooling process that creates an exceptionally strong joint. Brazing is largely used in diamond tooling to create grinding tools.
Electroplated tools are manufactured by causing nickel ions with a positive electric charge to leave an anode and create a matrix around a negatively charged single-layer diamond. This creates a bond around the entire tool. Electroplated tools can be refurbished using reverse plating, which allows for significant cost savings to the tool owner.
The manufacturing process is typically dependent on the application. For example, sintered tools are used widely in stone and construction applications, while electroplated tools are very often used in applications where the machining of softer materials is desired. Generally speaking (looking at all applications), electroplated wire saws make up the majority of demand (over 55% in 2007).
From 2002-2007, the world market for diamond tools grew at an average annual rate approaching 10%. Within each of the main end-use markets for diamond tools (stone/construction, machinery, transportation, and electronics) growth rates vary considerably. Both the stone/construction and transportation markets grew at the moderate rates of 5.1% and 4.8%, respectively, while the electronics and machinery markets showed stronger growth at 8.6% and 15%, respectively.
In 2007, the stone/construction market was the largest market for diamond tools at 45.5%. This was followed by the machinery, transportation and electronics industries. Within the stone/construction sector, the largest product sectors include saw blades and diamond wire saws, which made up 29% and 23%, respectively. Within the stone/construction market, diamond composites and electroplated tools are more widely used over other types of tools since diamond size, quality and distribution can be varied easily.
In the stone and construction sector, the largest demand by country continues to come from the major quarrying sectors of the world, including Italy, Brazil and the Middle East (such as Turkey and Iran). In 2007, the greatest demand came from Italy at 10.9%, followed by Brazil at 11.5%. Brazil has also shown the strongest year-over-year growth rate at 6.9%, followed by Africa, the Middle East and China.
On average, diamond tool life is 100 to 200 times the life of a carbide tool in the same application. Toolmakers estimate that savings per part machined can reach 30%, depending on the workpiece material and applicable tooling speed. Further, diamond tools achieve a finer finish, thus reducing finishing and waste removal costs as well.
The main drawback of diamond tools is that they can only be used on non-ferrous, non-metallic materials, which excludes them from a vast number of applications. Also, diamond tools are fragile and have specific application parameters, so misuse resulting in breakage is extremely expensive. Further, due to their extreme hardness, diamond tools are difficult to sharpen and generally cannot be reused. Thus, the application of diamond tools can be extremely beneficial but must be carefully monitored.
Of course, price varies according to the grade and demand for synthetic diamond. A critical factor in the growing demand for diamond tools is the falling price of synthetic diamond dust, powder and grit. The main suppliers of synthetic diamond are Diamond Innovations, formerly known as GE Superabrasives and recently acquired by Sandvik; Element Six, the synthetic diamond arm of DeBeers; and Iljin in Korea.
Also, a growing market naturally leads to increased competition. Currently, the diamond tool market is experiencing increasing competition from low-cost suppliers in China, Korea and Russia, where industrial diamond pricing is lower. Unfortunately, an intensifying competitive environment has also led to some unfair trade practices.
For example, suppliers from both Korea and China have been cited for the trade dumping (selling products at prices well below fair market value in order to gain market position) of saw blades in the U.S. As a result, the U.S. Department of Commerce has had to instruct the U.S. Customs Bureaus to assess a cash deposit or bond equal to fair market margins ranging from 2.5 to 164% in an effort to level the playing field.
Major suppliers of diamond tools include Asahi Diamond, Saint-Gobain/Norton, Tyrolit, Fujimi, Boart Longyear, and Husq Varna. Suppliers have begun to focus on core and niche markets in an effort to increase margins. For example, Husq Varna continues to be the largest worldwide supplier, followed by Tyrolit and Pellegrini in the stone/construction sector (particularly in diamond wire saws). In the more general field, Asahi Diamond and Saint-Gobain/Norton hold a greater share of the market.
Editor’s note: The foregoing information was based on three reports recently published by Dedalus Consulting: Abrasive & Superabrasive Materials and Products: Global Analysis & Forecasts 2008-2013; Hard & Superhard Materials: Global Analysis & Forecasts 2008-2013; and Diamond Tools: Global Analysis & Forecasts 2008-2013. For more information about these reports, contact Dedalus Consulting at (718) 622-0830, fax (718) 622-0831, e-mail info@dedalusconsulting.com or visit www.dedalusconsulting.com.
Industrial diamond can be defined in two ways: natural diamond that does not meet the standards of gem diamond because of color, size or other imperfections; or diamond that is synthetically manufactured for industrial applications. In 2007, over 90% of all industrial diamond use was synthetic.
A diamond tool uses embedded particles of industrial diamond in the cutting edge, which increases both product performance and the life of the tool. Types of tools include saw blades, wire saws, grinding wheels, drill bits, gang saws, core drills, band saw blades and dressers.
Figure 1. Global diamond tool demand by end-user industry
($MM) for 2007.
Manufacturing
Several processes are used to manufacture diamond tools, including sintering, brazing and electroplating. Sintered tools are made by bonding fine-size powders, such as tool steels, ceramics (e.g., aluminum oxide and silicon carbide) and diamonds, to create an admixture that is then pressed under extreme pressure and temperature to form a solid matrix.Brazed tools are manufactured through the bonding of two materials by means of a metal alloy with a lower melting point. The two pieces of material are bonded together by a heating and cooling process that creates an exceptionally strong joint. Brazing is largely used in diamond tooling to create grinding tools.
Electroplated tools are manufactured by causing nickel ions with a positive electric charge to leave an anode and create a matrix around a negatively charged single-layer diamond. This creates a bond around the entire tool. Electroplated tools can be refurbished using reverse plating, which allows for significant cost savings to the tool owner.
The manufacturing process is typically dependent on the application. For example, sintered tools are used widely in stone and construction applications, while electroplated tools are very often used in applications where the machining of softer materials is desired. Generally speaking (looking at all applications), electroplated wire saws make up the majority of demand (over 55% in 2007).
Figure
2. World diamond tools in stone and construction by product type ($MM), 2007.
World Market
The world market for diamond tools has shown significant growth over the last five years. The main reasons for growth include the higher performance levels of diamond tools over other tool grades, such as cemented carbide, high-speed steels, or other superabrasive materials, as well as decreasing prices for diamond tools. Price decreases are due mainly to the falling prices of synthetic diamond materials.From 2002-2007, the world market for diamond tools grew at an average annual rate approaching 10%. Within each of the main end-use markets for diamond tools (stone/construction, machinery, transportation, and electronics) growth rates vary considerably. Both the stone/construction and transportation markets grew at the moderate rates of 5.1% and 4.8%, respectively, while the electronics and machinery markets showed stronger growth at 8.6% and 15%, respectively.
In 2007, the stone/construction market was the largest market for diamond tools at 45.5%. This was followed by the machinery, transportation and electronics industries. Within the stone/construction sector, the largest product sectors include saw blades and diamond wire saws, which made up 29% and 23%, respectively. Within the stone/construction market, diamond composites and electroplated tools are more widely used over other types of tools since diamond size, quality and distribution can be varied easily.
In the stone and construction sector, the largest demand by country continues to come from the major quarrying sectors of the world, including Italy, Brazil and the Middle East (such as Turkey and Iran). In 2007, the greatest demand came from Italy at 10.9%, followed by Brazil at 11.5%. Brazil has also shown the strongest year-over-year growth rate at 6.9%, followed by Africa, the Middle East and China.
Benefits and Limitations
As mentioned previously, the main benefits of using diamond tools are increased productivity and cost savings in the machining or tooling of non-ferrous or non-metallic materials. Diamond tools are able to achieve higher tooling speeds, which allows for the processing of more parts per hour, and they offer innate longer tool life, which translates to time saved since fewer tool changes are necessary.On average, diamond tool life is 100 to 200 times the life of a carbide tool in the same application. Toolmakers estimate that savings per part machined can reach 30%, depending on the workpiece material and applicable tooling speed. Further, diamond tools achieve a finer finish, thus reducing finishing and waste removal costs as well.
The main drawback of diamond tools is that they can only be used on non-ferrous, non-metallic materials, which excludes them from a vast number of applications. Also, diamond tools are fragile and have specific application parameters, so misuse resulting in breakage is extremely expensive. Further, due to their extreme hardness, diamond tools are difficult to sharpen and generally cannot be reused. Thus, the application of diamond tools can be extremely beneficial but must be carefully monitored.
Figure 3. Historical growth of world diamond tools in
stone and construction.
Pricing
Off-the-shelf diamond tools typically cost from six to eight times more than other tool types (i.e., carbide or high-speed steel). For example, 140 to 500 micrometer diameter wire costs approximately $0.20 per foot ($0.7/m) to manufacture and sells for approximately $1.25 per foot. Thus, a 1000 ft (300 m) spool of diamond wire costs around $200 to manufacture and sells for around $1250. However, according to diamond tools supplier Tyrolit, the growing success of diamond tools, particularly wire saws, is due to the cost savings and performance efficiency of the products over the life of the tool.Of course, price varies according to the grade and demand for synthetic diamond. A critical factor in the growing demand for diamond tools is the falling price of synthetic diamond dust, powder and grit. The main suppliers of synthetic diamond are Diamond Innovations, formerly known as GE Superabrasives and recently acquired by Sandvik; Element Six, the synthetic diamond arm of DeBeers; and Iljin in Korea.
Competition
In general, competition within the diamond tool industry is based on balancing performance and pricing. Suppliers are continually trying to gain market share by convincing end-users of the benefits of diamond tools when applied correctly.Also, a growing market naturally leads to increased competition. Currently, the diamond tool market is experiencing increasing competition from low-cost suppliers in China, Korea and Russia, where industrial diamond pricing is lower. Unfortunately, an intensifying competitive environment has also led to some unfair trade practices.
For example, suppliers from both Korea and China have been cited for the trade dumping (selling products at prices well below fair market value in order to gain market position) of saw blades in the U.S. As a result, the U.S. Department of Commerce has had to instruct the U.S. Customs Bureaus to assess a cash deposit or bond equal to fair market margins ranging from 2.5 to 164% in an effort to level the playing field.
Major suppliers of diamond tools include Asahi Diamond, Saint-Gobain/Norton, Tyrolit, Fujimi, Boart Longyear, and Husq Varna. Suppliers have begun to focus on core and niche markets in an effort to increase margins. For example, Husq Varna continues to be the largest worldwide supplier, followed by Tyrolit and Pellegrini in the stone/construction sector (particularly in diamond wire saws). In the more general field, Asahi Diamond and Saint-Gobain/Norton hold a greater share of the market.
Future Outlook
The main obstacle to the growth of the industry is education. The majority of end-users continue to value direct tool cost over longer tool life and greater long-term productivity. Looking toward the future, new diamond tool production technologies, such as thermal deposition in cutting tools, are continually being developed. As these new techniques are implemented, the cost of diamond tools can be expected to drop further.Editor’s note: The foregoing information was based on three reports recently published by Dedalus Consulting: Abrasive & Superabrasive Materials and Products: Global Analysis & Forecasts 2008-2013; Hard & Superhard Materials: Global Analysis & Forecasts 2008-2013; and Diamond Tools: Global Analysis & Forecasts 2008-2013. For more information about these reports, contact Dedalus Consulting at (718) 622-0830, fax (718) 622-0831, e-mail info@dedalusconsulting.com or visit www.dedalusconsulting.com.