The key point of steel pipe market is products adjustment

    Compared to previous years, the steel pipe market in 2011 is plight of heavy. Not only can it be seen in serious excess capacity, supply and demand contradiction, more reflected in steel pipe products’ structural upgrading and slow pace of integration. It has been difficult to keep up with the processes of a variety of market demand. Based on market factors on the steel pipe industry’s future sustainability constraints and impact, we make a simple analysis of overcapacity, weak demand and product refinement of structure these three issues :
    First dilemma: capacity is high, supply and demand has contradiction
    According to statistics, in 2011 the domestic pipe production capacity will reach 70 million tons, compared with 57.65 million tons in 2010 domestic production, new capacity will be close to 12 million tons, an increase of up to 20%. Seamless steel pipe accounts for about 45% of total capacity, while the weld pipe about 55%. The main reason of fast growth of steel pipe production capacity is our country has many steel pipe enterprises which mainly have low-end products, and density is not strong, particularly in the “11th Five-Year Plan” development process of urbanization’s growth of private steel pipe. It is one of essential factors to continue soaring for the driving capacity. However, with the production base increasing, market competition tends to be “intense”, bidding system was chaotic, increasing supply and demand were to some extent exacerbated the steel pipe market this year.
    Second dilemma: hard to find a breakthrough of demand
    After the “Golden September and Silver October,” meeting with “Waterloo” dilemma, the steel pipe market show a state of malaise, steel pipe price decline has become an indisputable fact. Although this year’s consumption of seamless steel pipe as a whole has increased, but demands have different degrees of decline compared to last year, mainly because the cost disadvantage has increased the terminal procurement of hesitation and slow. In a serious excess capacity, weak domestic demand terminal, degradation of international export environmental, pipe price get out of dilemma in the short term is unlikely.
    Third dilemma: tube ideas converting, product adjustment is still the key point
    “12th Five Year Plan” proposed “product structure adjustment, product upgrades, and energy scheduling” ‘s goals and development strategies. Not only the steel market should achieve these basic standards, but also it’s the urgent problem most steel mills are facing, including steel pipe. For this year’s steel pipe market doldrums, people are only summarized and analyzed the surface formation reasons of phenomenon, such as overcapacity, too tight price regulation, market funds flows blocked and demand trapped. But they ignored the steel pipe product itself, such as product specifications differentiation, upgrades, structural integration. From 2011 steel pipe demands of the downstream industry, machinery, construction, petrochemical and other industries have become major force in steel pipe demand, which particularly the oil well pipe and seamless steel pipe of boiler tubes have the strongest demand. With crude oil, natural gas and to increase the intensity of hydropower, the new investment represented by nuclear energy has strengthened, expected market demand for such tube will be further increased.
    In summary, experts believe that although the cost of upstream and demand of downstream is the direct reason of steel pipe market price fluctuations, but the product itself has the characteristics and structure of the replacement often can not be ignored. Based on steel pipe market trends and potential future needs, a good selection of product groups and rational structural adjustment not only enhance the competitiveness of enterprises, but also find a new growth point to the demand for the market.

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