The external uncertainty continued as China’s steel exports increased

In the first eight months of this year, China’s steel industry showed a good performance under the background that China’s economy is stable and improving, but the external uncertainties have brought some downward pressure on the development of the structural steel pipe. Driven by domestic demand, China’s steel output maintained high growth in the first eight months, rising 9.1 per cent year on year, 6.9 per cent year on year for steel, 6.9 per cent for iron and 11 per cent for timber. During the same period, Chinese steel prices fell 5.3 per cent year-on-year. The supply and demand side of the Chinese steel market is still in a weak equilibrium state, and the market’s expectation of the supply and demand contradiction is strengthened under the circumstance of high production. Judging from the monitoring of the association’s member companies, corporate profits in the first seven months had been on a downward trend.

square pipe

In terms of imports and exports, China’s steel exports have declined for the fourth consecutive year. In the first eight months of this year, China’s steel exports of rectangular hollow section were 44.974 million tons, down 4.4 percent year on year, while steel imports fell 12.8 percent year on year. Experts believe that the decline in steel exports this year is related to the international economic downturn and increased domestic demand in China. This year will be the fourth year of China’s supply-side reform.From 2016 to 2018, the domestic steel market of galvanized steel pipe is in a state of relatively tight balance between supply and demand and the price movement is mainly driven by changes in the steel supply side.With the deepening of supply-side reform, industrial chain profits will be redistributed in 2019, steel prices fluctuate in a narrow range, and corporate profits will return to some extent.

Looking ahead to the steel market, China’s infrastructure investment will gradually improve in the second half of this year, providing support for steel demand.Steel supply and demand will shift from tight balance to relatively loose supply, export demand is flat. At the same time, the steel cost has moved down a step, the second half of the steel production enterprise profits will return. As one of the pillar industries of the national economy, there are still many opportunities for the steel pipe suppliers. We hope relevant parties can strengthen exchanges and cooperation and jointly promote the sustainable and healthy development of the industry.

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Post time: Jan-18-2021
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