Table of Contents
5.3 Market Demand Analysis and Forecast in China
5.3.1 Demand Characteristics
Steel used as the bearing structure of light steel structure residence should be Q235-B, Q345-B or Q340-A steels, their quality should comply with the current National Standards: GB/T 700: Carbon Structural Steels and GB/T1591: High Strength Low Alloy Structural Steels respectively. When other brands of steels are used, the corresponding regulations and requirements should be met.
The steels used in light steel structure should have conformity guarantees in respects of tensile strength, elongation rate, yield strength as well as contents of phosphorus and sulphur. For the steels used for welding bearing structure, the conformity guarantees of carbon content and bend test should be available.
The ratio of measured value of yield strength to that of tensile strength for the bearing steel structure with seismic-resistance requirements should be less than 0.85, the elongation rate should be large than 20%.
The strength design value and physical properties of steels should comply with the related regulations in current national standards: GB50017: Code for design of steel structures and GB50018: Technical code of cold-formed thin-wall steel structures.
5.3.2 Main Regional Distribution
With the rising of labor force costs on the Southeast Coast of China, the former large-scale manufacturing enterprises with sufficient capitals in this region transfer their capacities into Midwest of China successively, so as to reduce costs. The large manufacturing enterprises in other regions also transfer their capacity voluntarily into west region. Household electric appliance enterprises and electronic enterprises are the main forces in this industry transfer and also one of key customer types of light steel structure.
Tab.11: Industry Transfer Channels of Large-scale Household Electric Appliance Enterprises and Electronic Enterprises
Company Original production bases New production bases
Foxconn Guangdong Zhengzhou, Chongqing, Chengdu, Wuhan, Langfang, Huaian and Nanjing etc Industry parks
Midea Guangdong Newly-built Handan Air Conditioner Base, Jingzhou Refrigerator Base and Wuhu All-in-one Machine and Compressor Base, etc.
Gree Zhuhai Newly-built Hefei and Chongqing Bases; Zhengzhou production base and Wuhan production base are under construction.
Intel Shanghai Newly-expanded Chengdu Production Base
HP Newly-built Chongqing Laptop Production Base.
Judging from macro data, the proportion of fixed asset investment in Midwest of China will increase considerably in long run, currently, Midwest of China is the main region of light steel frame.
The large project contracts released by related company also suggest the momentum of industry transfer in recent 2 years: Midea has transferred their capacity into Wuhu and Hefei in recent 2 years.
Regardless of industry acceptance, upgrading or concentration, there will be the demand for workshop, while the proportion of steel structure architecture in workshop is large, so the demand for steel structure industry will certainly increase.
5.4 Consumption Situation Analysis and Forecast in China
Development Prospect of light steel structure
Market demand for light steel structure mainly concentrates into two aspects: one is engineering construction, mainly for the renovation and construction of workshop etc. In US, Steel structure accounts for 50% in engineering construction and the light steel frame system accounts for 70% in non-residence or the building under 2-story; In Japan, most of newly-built one–four story architectures adopt light steel structure; the other one is light steel structure residence. In many industrially-developed countries, such as US, Japan, UK and Australia etc, the steel structure residence has already popularized. For example, in Australia, the steel frame residence accounts for 50% of total residence, In North America, the steel structure residence is increasing by 30% year by year and the newly-increased number has changed from 200 residences into 2000-3000 residences each year. The development of steel structure residence in China is not mature yet, at present, the steel structure building mainly used as industrial workshops etc.
Factors promoting growth
Besides the national energy-saving and emission-reducing strategy, the high demand for workshops, accelerating construction of infrastructure, industry transferring and upgrading are also the factors promoting fast growth of light steel structure.
The compound growth rate of gross value of industrial output hit 21.5% in the first four years during the 12th five-year plan period, the constantly high growth of gross value of industrial output lays solid foundation for demand for industrial workshop. After Beijing Olympic Games in 2008 and Shanghai International Fair 2010, the acceleration of infrastructure construction, the construction of three-dimension traffic in cities and the vigorous development of urban public traffic need large amount of provisional buildings, which provides many opportunities for the development of light steel structure.
In addition, under the ground of industry transferring and upgrading, the workshop construction drives demand for light steel structure considerably, industry transferring and upgrading promote the demand for light steel structure indirectly.
Regardless of industry acceptance, upgrading or concentration, there will be the demand for workshops, while the proportion of steel structure architecture in workshops is large, so the demand for steel structure industry will certainly increase. The cost of pure steel structure in workshop is about CNY400-450/m2. Considering that some workshops are not steel structure, we assume the cost of unit structure steel in workshops and warehouses was CNY 200/m2, in 2011-2012, the market of steel structure used for workshop and warehouse were about CNY 107.1 billion and 112.5 billion respectively.
Tab.12: Consumption Forecast of Light Steel Frame, 2015-2020
Source: Huidian Research
5.5 Price Trend in China
5.5.1 Price trend, 2010-2014
Since 2011, the falling of steel price created sound gross profit rate environment for light steel frame industry. The prices of main steels had fallen by 15% since the middle of this year. Because the owners are not as sensitive to steel prices as steel structure companies, the contract prices signed were seldom required to adjust, the steel structure companies can enjoy the gross profits caused by the falling of steel prices. There were many order contracts signed by steel structure companies under the background of high steel price in the first three quarters, so the gross profits brought about by the falling of steel prices are expected to be huge.
Tab.13: Market Price Trend of Light Steel Frame Products, 2010-2014
Source: Huidian Research
5.5.2 Current Market Price and Analysis
Tab.14: Market Price of Light Steel Keel Products
Quotation for Hot Galvanizing Light Steel Keel
60 main keel 1.2 thickness m ¥8.20 75 vertical 0.6 thickness m ¥7.20
50 main keel 1.2 m ¥5.00 m ¥7.40
50 main keel 1.0 m ¥4.80 m ¥8.30
38 main keel 1.0 m ¥3.00 75 floor runner track m ¥5.20
38 main keel 0.8 m ¥3.30 100 vertical m ¥6.70
Middle keel 0.43 m ¥3.00 m ¥8.20
Middle keel 0.4 m ¥2.85 m ¥8.50
Small keel 0.4 m ¥2.50 m ¥9.20
150 vertical 0.8 m ¥13.50 100 vertical m ¥8.00
150 (floor runner track) 0.7 m ¥13.00 m ¥9.50
Source: Huidian Research
At present, 70% of market shares of light steel structure are taken by domestic enterprises in China, however, the prices of light steel structures of foreign brands are higher than that of domestic products, in similar products, and the prices of imported light steel structures are 4-5 times higher than that of domestic products, the prices of light steel structures of foreign brands are 1-3 times higher than that of domestic products.
5.5.3 Factors Influencing Price
Tab.15: Factors Influencing Light Steel Frame Price
5.5.4 Forecast on Price Trend, 2015-2020
Tab.16: Market Price Trend of Light Steel Frame Products, 2015-2020
Source: Huidian Research
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