China's total automobile demand for 2007 has been estimated at 8.5 million units, up 15 percent year on year. In the first half of 2007, the domestic vehicle market boomed, with both output and sales quantities in March reaching 800,000 units - the highest historical monthly figure.
As a result, China's total consumption of steel in automobile production is expected to be around 13 million metric tons in 2007. Of this figure, steel sheets and structural steel account for 9.5 and 3.1 million metric tons respectively.
Due to the rapid increase in domestic automobile demand, China's automobile producers and steel mills are building closer ties with each other.
Cooperation between the two industries include joint R&D efforts, the training of experts from each industry regarding the applications in the other, and also joint investments for the production of new components. The major local automobile companies - China Volkswagen, Shanghai Automobile Group and Dongfeng Automobile Group - are involved in such collaborations.
Meanwhile, some motor valve steel, special bars, high quality free-cutting and CR deep- drawn products required for high class cars are still dependent on imports. South Korean steelmaker POSCO's automobile steel exports to China have reached 200,000 metric tons so far in 2007, accounting for 25 percent of the company's automobile steel exports. The Chinese automobile industry is also an important market for foreign steel mills in the US, EU, Russia and other Asian counties.