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| Cold-rolled precision steel is a relatively new industry in China. Manufacturers in China generally import precision steel products from Japan, Korea, the European Union and the United States. According to Freedonia Custom Research, consumption of high precision cold-rolled narrow strip products with width below 600 mm and thickness starting 0.05 mm, amounted to 1.4 million metric tons in 2008, growing at a CAGR of 19.1% from 2005 to 2008, and projected to grow 10.0% per annum from 2008 to 2011. This growth is expected to be driven by further increases in the production of food and beverage packaging, optical fiber cable, household appliances, batteries, and electronic components. Rising construction and decoration expenditures are also expected to support growth in this market. Imports of narrow plates have declined while Chinese manufacturers have increased their production over time. According to Freedonia, from 2008 through 2011, the production of metal food and beverage containers, insulated wires and cables, optic fiber cables, and household appliances in China is expected to grow at CAGRs of 10.9%, 11.5%, 17.8%, and 7.3%, respectively. Furthermore, the consolidation of the crude steel industry will positively impact our raw material procurement as a result of fewer producers and reduced volatility of steel price. |
