“two markets”should move together for steel pipe industry

In 2018, the problem of excess steel production capacity like mild steel tube in China was effectively alleviated, high-quality steel production capacity was brought into full play, and corporate profits were significantly improved, which reflects the resilience and great potential of the steel pipe industry. In 2019, with the gradual improvement of the domestic market environment and deepening development of international cooperation of production capacity, the steel industry should also make full use of and coordinate the domestic and international markets and continue to eliminate backward production capacity. In addition, steel pipe manufacturers should strictly prevent new production capacity and maintain the balance between supply and demand to ensure the benign interaction between the domestic and international markets. China’s steel market environment will be significantly improved in 2018 because of the in-depth supply-side structural reform.

structural steel pipe

In the first 11 months of 2018, China imported 978 million tons of iron ore, down 1.3 percent year on year, with the amount of 70.9 billion US dollars, down 2.8 percent year on year. The stability of the steel pipe market is closely related to the oversupply of structural steel pipe in the world on the one hand, and also benefits from the in-depth communication and consensus between China and the major pipe factories in the world on the other hand. In addition, steel enterprises tend to rational procurement, which is also an important reason. In the first 11 months of 2018, China exported 63.78 million tons of steel, down 8.6% year on year, and imported 12.16 million tons of steel, up 0.5% year on year. However, China’s steel exports have declined for three consecutive years and the industry should be highly concerned.

Despite the decline in export volume, steel pipe manufactures in China have been steadily promoting international operation in recent years, and the potential of technological innovation in the steel industry has been further released. From the domestic market, it is expected to have a small increase in steel demand in 2019. Although the growth rate of the machinery industry has slowed down, the overall growth is still maintained and steel demand for rectangular hollow section is expected to remain stable in 2019. However, as the main driving force of economic growth has shifted from investment to consumption, the new economic growth point has weakened the strength of steel demand, and the demand of traditional steel enterprises for steel products has shifted from variety and quantity growth to quality and quality improvement.

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Post time: Apr-01-2019
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