Analysis of this year’s situation and next year’s market trends of steel pipe industry

    “12th five years plan” provide guidance for the steel pipe industry to healthily develop.
    From the “12th five years plan”‘s steel consumption forecast, the demand for steel market is very strong. “12th five years plan” forecasts, oil well pipe consumption increased by 3.8 million tons last year, 4.7 million tons in 2015, power plants with high-pressure boiler tubes from 48 tons to 70 tons.
    “12th five years plan” put the pipes field to a new products and new technology research and development to enhance the strategic level, to accelerate the achievement of China’s steel tubes large production country transfer to the steel production powerful country. This is both a challenge and an opportunity for steel pipe industry. Similarly, for the domestic steel tube market, “12th five years plan” have injected energy and vitality. In the next five years, the domestic steel market will become more standardized, orderly and healthy development.
    The steel pipe industry has serious structural overcapacity trouble
    Over the past 10 years, China’s steel pipe industry had sustained and rapid development, with an annual growth rate about 15%, steel production capacity has nearly 70 million tons. Last year, China’s steel production reached 57.65 million tons, accounting for about half of global output, of which 55% of the pipe this year, steel production enterprises momentum is still very strong, January to October, production was 21.867 million tons of domestic seamless steel pipe, 9.8% more than last year; pipe production reached 32.712 million tons, an increase of 28%. Steel output of this year will exceed 60 million tons, in which weld pipe and seamless pipe accounted for 55:45.
    China’s steel pipe production capacity’s rapid expansion thanks to the sustained and stable economic growth, urbanization driving the pipe consumption increased significantly. In addition, a large number of exports also contributed to the growth of steel production, as optimistic about the domestic steel market, steel pipe significantly expand the production scale. According to the statistics of professional organizations, 2009 to 2011, China’s new seamless steel pipe production capacity has about 10 million tons. Continued expansion of steel production capacity, is far more than the market demand, which increases competition in the market.
    The industry people believe that China’s steel pipe industry facing major problems are the following: structural overcapacity is becoming more serious; low industry concentration and the irrationalis, slow process of elimination of outdated equipment, arduous task; weak capacity of independent innovation,  relatively weak basic research and process research; intensifying market competition, declining corporate profits. The entire steel pipe industry is facing high costs, high output, high demand, low profit grim situation. This is the steel pipe industry during the “12th five years plan” need overcome and resolve problems.
    Steel market trends of next year    
    For the steel market’s run trend of this year and next year, the industry people believe that the current steel pipe market continually stay in a increase supply, relatively stable demand. Export growth is limited, cost pressures and competition are increasing, profit margins of companies is shrinking. Therefore, the steel market this year will not have a much improvement, prices will remain volatile activity slightly.
    Next year, the domestic steel pipe market will still run under the high raw material prices adversely affected. Manufacturers and businesses will face more intense competition, the market is not optimistic, mainly in the following aspects: First, by the impact of the European financial market turmoil intensified, global economic recovery is slow; the second is the continued appreciation of RMB, North Africa and Middle East chaos have impacts on China’s steel exports; Third, the domestic economic has slowdown, the state regulation and control of monetary has liquidity, capital continued tight, constraint the steel demand release; fourth, supply and demand contradiction continues to exist; Fifth, the high cost of production to curb prices. Given the coexistence of good and bad factors intertwined, the domestic steel pipe market is expected that the boom degree is not too high next year, high and volatile prices in general will show the operation pattern. 

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