China's property market has slowed down under tightening policies, and this has begun to cool off related sectors such as the steel, cement and home furnishing industries, the China Business News reported Monday.
China's real estate sector is the largest consumer of its steel products, using up 36.1 percent of the 560 million tons of steel produced last year, according to the China Iron & Steel Association. Its development also influences home appliances, machinery and auto industries, which are also major users of steel products.
"A sluggish housing market would deal blows to the steel demand from multi angles," Zhang Ping, industry analyst with uc361.com told the paper.
The financial crisis once swept China's housing market into gloom in 2008. In the fourth quarter that year, almost all the Chinese steel makers fell into red, forcing them to reduce or suspend production, said the paper.
A cooling housing market would impact less on the cement industry than the steel industry, Zhang Jianxing, executive vice-president of the China National Building Material Corp's Southern Cement Company, told the paper.
Demand on cement would drop 5 to 10 percent on the policies, Zhang said, adding that the impact on the cement industry would not emerge until three to five months later.
However, analysts with TX Investment Consulting Company are positive on this sector, as it is now the high construction season for projects already started, and the portion of housing projects in fix-asset investment varies in different areas.
As for the home furnishing sector, the cooling housing market will lead to a shrink in housing furnishing areas and a drop in sales of home products, said Ding Hongzuo, head of China Furniture & Decoration Chamber of Commerce.
