Steel demand in China's household appliances industry

China has become a huge producer country in the household appliances sector. Enormous quantities of middle- or small-sized household appliances are now being made in China and then transferred all over the world. And output still continues to grow by 10-35 percent year on year. By 2005, the total sales revenue of China's household appliances sector had exceeded RMB 350 billion, namely USD 42 billion. Just taking TV sets as an example, in 2005 there were about 83 million televisions made in China, marking a growth rate of 13 percent over the previous year. Of these, nearly 40 million were exported to other countries across the world, representing a growth rate in exports of 58 percent year on year. The rapid household appliances output growth increased consumption of a number of steel products. According to the approximate data, from 2001 to 2005 the quantity of steel used to make household appliances grew rapidly. The average growth rate was about 25 percent year on year. In 2005, the household appliances industry consumed a total of 5.3 million tons of steel. It is estimated that the demand for steel sheet in this industry alone will probably have reached 6.5 million tons by 2010. Regarding the different types of steel products, the demand of the household appliances sector can be summarized as follows: Cold Rolled Sheet Cold rolled sheet is mainly used in the manufacture of the outside body of household appliances, constituting nearly 30 percent of the total need for steel in household appliances. The cold rolled sheet is required to be smooth on the surface, of high quality and easy to paint. Currently, domestic steel production generally can meet requirements. The quality of the products is still being improved. Galvanized sheet In the past, due to the low level of galvanizing technology, domestic steelmakers were unable to control the quantity of zinc in the plating process. As result, the thickness of zinc on sheets was not even and was always thicker than was actually necessary. However, with the technological improvements since introduced, at present domestic galvanized sheet fulfills the requirements of quality standards. It is estimated that China's galvanized sheet capacity will reach over 30 million tons - sufficient to supply the needs of the household appliances manufacturing industry. Prepainted sheet This steel product is mainly used to make refrigerator doors and the outside bodies of microwave ovens. The total demand for this type steel is not big - yearly need totals less than 70,000 tons. This is due to the production process. Steel sheets often need to be punched or cut during the manufacturing process of household appliances and then afterwards be painted. The painting is particularly necessary at the edge of punched holes or cut parts. Generally, household appliances mills are equipped with painting lines to complete the work in question. Therefore, purchasing prepainted sheet becomes unnecessary. Besides, the quality and safety requirements on prepainted sheet are very high. Currently, domestic prepainted sheet is unsuited to use in household appliances (due in particular to the presence of dangerous chemicals) and totally inferior to imported sheet. Thus the household appliances industry prefers in the main to use imports. With regard to the above-mentioned use of dangerous chemicals, more worldwide requirements regarding household appliances have been brought into effect in order to ensure the protection of the environment. The use of environmentally harmful elements such as lead and chrome has been prohibited. All these pressures have already been transferred to the steelmakers, who will have to face these current and many other potential challenges in the future.