Booming sales of fridges, toasters and microwaves to households across the locked-down world have helped propel China’s manufacturing engine back to life, super-charging demand for key metals like steel, copper and aluminum.
The manufacturing rebound marks a turnaround from the first half of the year, when the response to the pandemic that emerged in central China was a building and infrastructure boom that propelled construction-grade steel to a rare price premium over costlier manufacturing products.
China’s factory activity jumped the fastest in nearly a decade in October, according to a private business survey, with nearly one-third of surveyed companies expecting further improvement in 2021. Both domestic production and exports of home appliances are running ahead of last years levels, and have jumped since the third quarter on widespread restocking in major global markets like the US and Europe. Since China ended its lockdown in May, their output of fridges jumped by 25% from the same period last year and freezer output soared nearly 80%, according to National Bureau of Statistics data. Washing machine, TV, and vehicle output also increased.
Televisions, washing machines, microwave ovens, and other home appliances are also going to get costly this month due to a 15-40 per cent increase in input costs. It is anticipated that washing machines and air conditioner prices may go up by 8-10 per cent, and the rates of refrigerators might witness a spike of 12- 15 per cent. Copper, zinc and aluminum rates have been increased by 15-20 per cent in December, while ocean freight cost has risen 40-50 per cent.
The Bureau of Energy Efficiency (BEE) has postponed energy labelling upgradation norms for ACs by a year to 2022, which has helped as any tightening leads to a price hike. Refrigerator energy label norms too will only be upgraded in 2022.
This information is pulled from articles by Reuters and Business Today.