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China’s steel pipe industry is going through the winter

        Steel as an important base material,
its price change directly reflects the overall economic operation. Different from the foreign steel pipe market ¡®s looming
“spring”, the Chinese steel pipe industry is experiencing winter.
This is based on the result of China economic cycle adjustment, reflecting
China’s economy is in a downward phase, the demand for steel have dropped.

Different
performance of China
and foreign countries

Steel tubes¡¯ prices plummeted,
originating in China, the
hardest hit are China,
too. This winter round of Steel pipes belongs to China. When we talk of European
debt crisis and the U.S.
national debt run up, it neglected its own crisis. Recent it¡¯s the news that China attempt to save Europe, it seems that U.S. and
European economies are at the verge of collapse.

However, the performance
of European and American steel pipe market is very healthy. Recent
international steel market has two characteristics: First, no steel prices fell
sharply; the other is the production of steady growth. Europe and Russia
¡®s steel pipe market run more smoothly, prices remained stable. October 28, CRU
global steel price index was 199.9 points, steady compared with mid-August.
Among them, the North American market for steel price index rose 2%.On the other hand, the
international steel tube production continued to grow steadily. World Steel
Association statistics, in September, the world’s 64 major steel-producing
countries and regions, crude steel production was 123.6 million tons, an
increase of 9.7%, down 0.5%; but after deducting the production of China,
global crude steel production in September to 66,867,000 ton, an increase of
1.6%.

Different from the foreign steel pipe
market ¡®s looming “spring”, the Chinese steel pipe industry is
experiencing winter, enterprises are in the stage of low-margin. China Steel
Association statistics, from January to September, 77 key large and medium
steel companies¡¯ sale profit only had 2.99%; insiders of China Steel
Association expect, the main industry of steel tube industry¡¯s average profit
margin is only about 1.5%. In the last a few months, Chinese steel mills, steel
traders are unusually cold, steel pipe industry suffered price decrease and cut
the production, Wuhan, sand steel and other leading steel factory price
continued to drop, the market got into the winter in advance.

In addition, the China
Steel Association data show that in mid-October, its crude steel output of key
enterprises was 15.58 million tons, the national estimate value was 17,997,000
tons, and daily output was 1.585 million tons and 1.7998 million tons. At
present steel production of the whole country compared with the first half of
year had fallen to 1 percent, steel production capacity got severely inhibited.

Know
the economic through steel
        Steel price change, directly reflects
the overall economic operation. It is the economic decline has exposed the lack
of effective demand in the domestic steel market. This round of the steel product
prices down sharply, is the result of China’s economic cycle adjustment,
and a reflection of our economy in a downward phase, resulting in lower demand
for steel.
        From the trend, China’s economy
will eventually with inertia, go out of the cycle bottom. With the price drop to
expected, the policy fine-tuning is expected to increase, continued tight
credit policy will gradually loose. To borrow a word, the winter comes, can
spring be far behind? The bottom adjustment of the steel price will rebound with
the economic cycle out of the bottom.

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