The Zhitong Finance App learned that Zhongtai Securities released a research report saying that compared to offshore towers, the ocean wind fan base has better anti-deflation properties. According to global ocean wind emission expectations, the total global demand for tower+ infrastructure is expected to reach 13.11 million tons by 2028, and the CAGR will reach 34% in 23-28. European single pile foundations are expected to have a supply and demand gap around 26-27. Combined with a long period of expansion of single pile production capacity (generally 3-5 years), and relatively full orders from overseas manufacturers, further driving demand spillover, thereby providing external opportunities for domestic pile foundation manufacturers to go overseas. Recommended attention: Daikin Heavy Industries (002487.SZ), Tianshun Wind (002531.SZ), Haili Wind Power (301155.SZ), Runbang (002483.SZ), Taisheng Wind Energy (300129.SZ), Tianneng Heavy Industries (300569.SZ).

The main views of Zhongtai Securities are as follows:

European seabreeze installations are expected to grow rapidly, and future supply and demand gaps for single pile products are expected

Major European Seabreeze markets: UK: Currently, the total installed capacity is 14.8 GW, and the total amount of CFD auction projects in the third and fourth rounds is expected to be put into centralized operation in 24-27. At the same time, against the backdrop of a sharp increase in the CFD quotation limit, it is expected that 10GW+ projects will participate in the bidding in the sixth round; Germany: Currently, it has a total installed capacity of 8.5 GW, and is expected to be put into centralized operation in 27-30 years; Netherlands: Currently, 4.7 GW of installed capacity, and 1.5 GW of projects under construction. Tender for 15GW.

European Seabreeze Infrastructure

In 2020, European single-pile foundations accounted for 81% of all seabreeze foundations, and were the most important form of seabreeze foundations, followed by conduit frame foundations, accounting for 10%. It is expected that subsequent single-pile foundations will still dominate.

The basic market pattern of European Seabreeze

Sif, EEW, Steelwind, and Bladt are established European single pile manufacturers. Judging from the installation caliber, the Dutch SIF and German EEW account for nearly 90% of the market share of the Seabreeze installed between 2018 and 2020, while Denmark's Bladt and Germany's Steelwind account for about 10% of the market. In terms of order size, according to the supplier's official order (single pile and transition parts), Sif, EEW, and Steelwind accounted for 30%, 26%, and 11% of the global market (excluding China) in the 2030 global market (excluding China), respectively.

European single-pile foundations are expected to begin to experience a demand gap around 26-27

According to WindeEurope (2022), demand for single piles in Europe will exceed the supply of single piles by '27, there will be a shortage of supply for floating foundations by '25, and there will be a relatively sufficient supply of conduit frame foundations. According to Sif (2023), demand for single piles in the European and American markets (EU+UK+East Coast of the United States) will reach about 222/427/4.7 million tons in 27-29, while the supply of single piles in 27-29 is about 2 million tons. The corresponding gap is 22/227/2.7 million tons. The supply and demand gap has widened rapidly since '27.

European single-pile foundations are expected to begin to experience a demand gap around 26-27

According to research estimates by Zhongtai Securities, the basic demand for European seabreeze will reach 3.41 million tons by 2028, of which the European single pile foundation demand in 26-28 was 146/190/2.65 million tons; at the end of '23, the production capacity of local European manufacturers was 1.1 million tons. Subsequent production expansion plans for Sif, EEW, Haizea, SeAH, and BSC have related production expansion plans. The corresponding supply and demand gaps are 136/166/1.84 million tons respectively.

Elements of internal competition:

1) Performance endorsement: Companies with overseas business experience are more recognized by international customers in terms of product quality, service capabilities, etc., and are more aware of the needs of foreign owners. The pace of relevant certification procedures is also faster, making it easier to enter the European Sea Breeze basic market.

2) Terminal/Transportation: As products such as single piles become longer in diameter and larger, the requirements for terminals are higher, and terminal resources themselves are relatively scarce, and enterprises with terminal resources are more competitive; at the same time, having their own terminals can ensure timely delivery of orders and effectively reduce the transportation costs of manufacturers.

3) Tariffs: Currently, Europe and the United States levy varying degrees of anti-dumping duties on Chinese steel tower products, but there are no relevant regulations on seabreeze basic products (single piles, transition parts, etc.). The export of single pile products, etc. is not subject to anti-dumping duties, which is beneficial to a certain extent for single piles to go overseas.

4) Cost advantage: Domestic companies have significant advantages over overseas companies in raw material prices. At the same time, they have more skilled workers, lower costs, higher production efficiency and lower manufacturing costs.

Risk warning: Demand for installed offshore wind falls short of expectations: increased market competition has led to a decline in profits; geopolitical risks hinder the exports of domestic pile foundation companies: risk of deviation in data measurement: risk after reference information is carried.