In 2018, China's mold steel output was about 2.362 million tons. Among them, auto molding consumes about 35% of total market for mold steel; consumption of mold steel in home appliance mould accounts for about 20% of total market; mold steel for electrical molding such as computers, mobile phones and electronic equipment accounts for about 20% of market. Plastic doors and windows, PVC water pipes and other building materials molds accounts for about 15% of market capacity of mold steel; in addition, electrical machinery, instruments, meters and other mechanical and electrical industries and defense industry also occupy a certain market share. As basic process equipment for industrial production, mold provides a strong support guarantee service for machinery, automobile, light industry, electronics, chemical, metallurgy, building materials and other industries.

 

As far as international market is concerned, the first thing to do is car manufacturing. According to statistical analysis of China Association of Automobile Manufacturers, due to policy factors and macroeconomic influence, China's production and sales in 2018 was lower than expected at the beginning of this year. Annual production and sales of automobiles were 27.809 million and 28.081 million respectively. Due to double impact of car sales base in 2017 and overall downgrade of consumption this year, overall sales of Chinese cars in 2018 decreased compared with same period of last year; cooling of automobile sales market also led to a certain decline in automobile production.
More than 90% of parts in automotive industry are molded from auto molding, using hot work, cold work and plastic moulding steel. In second half of 2018, production and sales of automobile industry both fell. From January to March 2019, production and sales of automobiles were 6.336 million and 6.372 million respectively. Production and sales decreased by 9.8% and 11.3% respectively over same period of previous year, which led to a decline in the demand for auto molding steel to a certain extent.

 

80% of parts in home appliance industry are molded by home appliance mould. The largest amount of plastic moulding steel (representing steel grades is P20 and 718) is used, and a small amount of hot work die steel and cold work die steel are used. In 2018, in addition to year-on-year decrease of 0.4% in washing machines, other three types of electrical appliances all increased year-on-year. Among them, output of color TVs in 2018 was 203.815 million units, an increase of 14.6% year-on-year; and output of air conditioners was 204.86 million units, an increase of 14.6% year-on-year. Compared with year-on-year decline in automobile production and sales, output of home appliance mould can still maintain a weak positive growth, and increase in the output of four major home appliance mould will drive growth of demand for die steel.

 

60%-80% of parts in electronic communication industry rely on electrical molding forming. According to statistics of National Bureau of Statistics, total output of electronic computers in China from January to December 2018 totaled 352 million units, an increase of 4.5% over same period last year. However from perspective of domestic mobile phone industry, domestic mobile phone market is becoming increasingly saturated, and shipments have fallen sharply. According to statistics of China Telecomtsu Institute, in the whole year of 2018, total domestic mobile phone market shipments were 414 million units, down 15.6% year-on-year, a decrease of 3.4 percentage points from previous year. In the first quarter of 2019, total shipments of mobile phones in the Chinese market totaled 76.931 million units, down 11.9% year-on-year.
In 2018, decline in domestic mobile phone market shipments may be related to saturation of mobile phone market. After several years of development, 4G mobile phones have not been greatly innovated, and upcoming 5G technology will bring blowouts to domestic mobile phone market and electrical molding. Although current decline in the output of electronic products such as mobile phones has reduced demand for die steel, as 5G commercial footsteps are getting closer and closer, it is expected that demand for die steel will be large in the future.

 

In downstream consumer industry of mold steel, building materials industry accounts for 15% of total. In 2018, building materials industry completed main business income of 4.8 trillion yuan, a year-on-year increase of 15%, total profit of 431.7 billion yuan, an increase of 43%, sales profit rate of 9.0%. Among them, main business income of cement was 882.3 billion yuan, a year-on-year increase of 25%; profit was 154.6 billion yuan, an increase of 114%. Main business income of flat glass was 76.1 billion yuan, a year-on-year increase of 7.2%; profit was 11.6 billion yuan, a year-on-year increase of 29%. Total profit of sanitary ceramics, waterproof materials, glass fiber and products, lime gypsum products and non-metallic minerals increased by 15.9%, 26.6%, 29.2%, 41.5% and 10.3% respectively. Overall economic operation remained stable, showing a stable and variable operating characteristics. Steady development trend of building materials industry will bring strong downstream demand to die steel industry.