[SMM Steel Manufacturing Industry Downstream Report: "Policy Support" Ensures a Satisfactory Outcome for the Manufacturing Industry in 2024!!]

As the year-end approaches, downstream manufacturing sectors delivered a satisfactory performance. Annual automobile sales may exceed 31 million units, reaching a new high in recent years; the retail scale of the home appliance market is expected to surpass the 2019 peak; excavator sales increased by 3.13% YoY; and in the shipbuilding industry, China accounted for 70% of global new ship orders, 53% higher than South Korea, which ranked second...

• CAAM:2024 Annual Automobile Sales May Exceed 3.1 Million Units

According to the China Association of Automobile Manufacturers (CAAM), China's automobile sales in 2024 are expected to reach approximately 31–31.3 million units, with a YoY growth rate of about 4%, marking a new high in recent years. Meanwhile, the latest "China Automobile Dealer Inventory Alert Index" (VIA) released by the China Automobile Dealers Association showed that the inventory alert index for Chinese automobile dealers in December 2024 was 50.2%, down 3.5 percentage points YoY and 1.6 percentage points MoM. The inventory alert index approached the 50 mark, indicating a continued improvement in the prosperity of the automobile circulation industry.

According to the latest data from the Ministry of Commerce, as of December 19, nearly 2.7 million vehicles had undergone scrappage and renewal nationwide, while over 3.1 million vehicles were replaced and renewed. Although the replacement and renewal subsidies were implemented for a short period, their incremental effect was significantly faster than the growth in scrappage and renewal numbers. December marked the push for annual targets at year-end, with major automakers striving to meet their annual sales goals. As the scrappage and renewal and trade-in subsidy policies near their end, coupled with the car purchase boom before the Chinese New Year, market demand for car purchases was stimulated in advance. Among automakers surveyed by SMM, 33.33% reported an MoM improvement in new orders in October, while almost none reported a decline. A Chongqing automaker noted, "As the New Year approaches, consumer willingness to purchase cars has significantly increased, and both production and sales this month have seen varying degrees of growth."

Figure 1: December Order Status of SMM Surveyed Automakers

Regarding order expectations for the next three months, only 8.33% of automakers surveyed by SMM held an optimistic view of demand. With the Chinese New Year approaching in January, the number of working days will decrease, and most consumers will return to their hometowns or go on vacation. Most companies indicated that they are preparing for holidays in January, with production nearing its end.

​

Figure 2: Demand Expectations for the Next Three Months Among SMM Surveyed Automakers

• AVC: China's Home Appliance Market Retail Scale in 2024 May Surpass the 2019 Peak

According to projections by All View Cloud (AVC), the retail scale of China's home appliance market in 2024 is expected to reach 892.2 billion yuan, potentially surpassing the 2019 peak, with a YoY growth of 4.7% compared to 2023. In the first three quarters of 2024, the retail scale of China's home appliance market was 614.4 billion yuan, down 0.2% YoY. Since the gradual implementation of the national subsidy policy in August, market confidence has been significantly boosted, with data from the "Golden Week" and "Double 11" shopping festivals exceeding market expectations.

In December 2024, home appliance sales showed a significant upward trend, particularly driven by the national trade-in subsidy policy, which effectively unleashed market consumption potential. Among home appliance companies surveyed by SMM, about 50% reported an MoM improvement in orders in December. A Sichuan-based home appliance company stated, "December orders and sales were excellent, especially in domestic trade, with improvements in both online and offline channels. The trade-in policy also aims to boost volumes by year-end."

Figure 3: December Order Status of SMM Surveyed Home Appliance Companies

Regarding order expectations for the next three months, as the year-end approaches, terminal procurement demand is gradually weakening. Among the sample companies surveyed by SMM, only 16.67% held an optimistic view.

Figure 4: Demand Expectations for the Next Three Months Among SMM Surveyed Home Appliance Companies

According to the latest production schedule report for the three major white goods released by ChinaIOL, the total production schedule for air conditioners, refrigerators, and washing machines in January 2025 is projected at 32.22 million units, down 4.3% compared to the actual production in January 2024. By product, the production schedule for household air conditioners in January is 17.14 million units, down 1.5% YoY; refrigerators are scheduled at 7.68 million units, down 6.5% YoY; and washing machines are scheduled at 7.4 million units, down 8% YoY.

Policy Support Continues: On January 8, 2025, officials from the National Development and Reform Commission (NDRC), Ministry of Finance, Ministry of Commerce, People's Bank of China, and State Administration for Market Regulation introduced the expansion and implementation of the "two new" policy, emphasizing increased support for key equipment renewal projects. The scale of funding for key equipment renewal projects supported by ultra-long-term special government bonds will also be expanded.

• China Construction Machinery Association: Excavator Sales Up 3.13% YoY in 2024

According to statistics from the China Construction Machinery Association on major excavator manufacturers, 19,369 excavators were sold in December 2024, up 16% YoY. Of these, domestic sales were 9,312 units, up 22.1% YoY, while exports were 10,057 units, up 10.8% YoY. In 2024, a total of 201,131 excavators were sold, up 3.13% YoY, including 100,543 units sold domestically, up 11.7% YoY, and 100,588 units exported, down 4.24% YoY.

This year, the overall growth in the production of machinery industry products outperformed last year. The continued implementation of the "two new" policy has driven steady improvement in machinery industry production, particularly in foreign trade. In the first 11 months of this year, the machinery industry's goods trade imports and exports reached $1.06 trillion, up 6.7% YoY, with the annual total expected to hit a new high. Among machinery companies surveyed by SMM, about 33.33% reported an MoM improvement in orders in December. A Zhejiang-based machinery company noted, "For the past one to two years, we have been operating at full capacity due to insufficient capacity. Export conditions are stable, with a positive shift in exports. Previously, we mainly exported to Southeast Asia, the Middle East, and Africa, but now we are gradually exporting to Europe, where demand is strong."

Figure 5: December Order Status of SMM Surveyed Machinery Companies

Regarding order expectations for the next three months, about 50% of the sample companies surveyed by SMM held a pessimistic view. Looking ahead to 2025, the machinery industry faces both opportunities and challenges. The global economic slowdown, intensified trade frictions, and the continued impact of high debt levels pose pressures on Chinese manufacturing. However, a series of proactive policies are expected to create favorable conditions for the demand market for machinery products.

Figure 6 : Demand Expectations for the Next Three Months Among SMM Surveyed Machinery Companies

• Clarksons: China Accounts for 70% of Global New Ship Orders in 2024

According to Clarksons, global shipyards received a total of 2,412 new ship orders in 2024, with a total order volume of 65.81 million compensated gross tons (CGT), up 34% from 2023 and reaching the highest level since 2007 (94 million CGT).

Among them, Chinese shipyards received 46.45 million CGT (1,711 ships) in orders, accounting for 70% of the market share. South Korean shipyards received 10.98 million CGT (250 ships), with a market share of only 17%. Shipyards in Japan and other countries/regions received 8.38 million CGT (451 ships), accounting for 13%. China led South Korea by 35.47 million CGT, marking the largest gap in history between the two countries.

*[Survey Method: Telephone Survey]

*[Sample Data: Random nationwide samples from industries such as automobile manufacturing, home appliances, machinery, and shipbuilding, totaling 100+ samples. The limited sample size may lead to deviations from actual conditions; please interpret cautiously.]