China’s white goods sector tipped to weaken

Steel demand from the white goods sector benefited Chinese mills last year, but the effect of a weaker housing market is set to adversely impact demand this year. China’s production of white goods – air conditioners, washing machines, freezers, refrigerators and televisions – totaled 532 million mt in 2017, up 11% year on year, according to data from the country’s National Bureau of Statistics. This growth rate was the highest since 2012. However, several market participants surveyed by S&P Global Platts were concerned the growth rate could slow in 2018, dampening demand for hot dip galvanized and cold rolled coil. One analyst said last year’s robust growth in white goods output could have been predicted in 2016, when property sales were robust. Property sales in China include a large portion of pre-sales by developers, and there is typically a one to two-year lag before they are delivered to buyers – so white goods demand generated by purchases always trails property sales. In China, apartments are often not fitted out until the owners occupy the premises because developers do not want the equipment to deteriorate. Apartments can therefore be kept almost as empty shells for long periods of time. Last year… continue reading

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Source: CTRM Center

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