The market research firms study, Machine Tools in China to 2012, found that demand for metal-cutting machine tools are expected to outpace that of other machine tool products. Metal-cutting machine tools, including lathes, milling machines, machining centers, grinding and polishing machines, and laser and electrical discharge machines, accounted for 38 percent of overall Chinese machine tool demand in 2007.

According to the report, the increase stems from rapid growth in the countrys largest market for machine tools, industrial machinery, as well as in transportation equipment, primary and fabricated metals, and electronic goods markets. Industrial machinery will remain the biggest market because of the wide range of applications and significant machine tool requirements in many of these industries. Machine tool demand for transportation equipment will be brought on by fast growth in the automotive industry, including auto parts production. The fastest growth is expected in the electronics sector, which requires high-precision, higher-end tools to manufacture components.

Nonmetal machine tools are also projected to grow at a respectable rate, driven by growth in wood, stone, glass and other nonmetal durable goods production.

As Chinas demand for both metal-cutting and nonmetal machine tools increases, the demand for metalworking fluids will also rise, according to the report. Freedonia estimates that Chinas metalworking fluid demand will increase 1.8 percent annually to 2.3 million metric tons, from 2007 to 2010.