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The Steel Pipe Industry Is In Deep Adjustment
Dec 13, 2017

As the supply side of the structural reform continues to advance, recently, including steel pipe industry, steel industry related metal products industry are brewing to the good trend, but the real turning point related industries is not yet in place. Data shows, after nearly 10 years of development, China's steel pipe industry in product structure, quality, technology and equipment, etc, constantly improved optimization, has become a veritable world steel pipe manufacturer, is currently the world steel industry strong. However, China's steel industry development stage and the structural contradictions have appeared in the process of become hinder the steel pipe industry sustained, healthy and stable development "bottleneck", the depth of the steel pipe industry adjustment is still in progress.

By large to strong

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At present, the development of China's steel industry overcapacity, the status of the enterprise profits, cost pressures increase, and environmental factors such as increased risk of capital increase gradually, the deep contradictions and structural contradiction more prominent.

It is reported that during the 12th five-year plan period, China's steel pipe production increased from 56.73 million tons to 98.27 million tons, with an average annual growth rate of 11.61%. Among them, the production of seamless steel tube increased from 24.17 million tons to 28.58 million tons, with an average annual growth rate of 3.40%. The output of welded steel tube increased from 3.256 million tons to 69.7 million tons, with an average annual growth rate of 16.45%. The domestic market share of steel pipe exceeds 99.0%, among which the seamless steel tube reaches 99.23%. The welded steel pipe reached 99.71%.

China's steel pipe industry provides an important raw material guarantee for oil and gas exploration, power, Marine engineering and ship, construction, tri-chemical, machinery, automobile and other industries, as well as the rapid development of national economy. Worldwide, China's steel pipe production in 2015 was 98.27 million tons, an increase of 11 percent year-on-year, and China's steel pipe production accounted for 58.5% of the total steel pipe output in the world. In 2015, the production of seamless steel tubes in the world was 414.4 million tons, a 14.6% year-on-year decline, and China's seamless steel pipe output was 28.58 million tons, a year-on-year decline of 9%, accounting for 69 percent of the world's seamless steel pipe production. In 2015, the production of welded steel tubes in the world was 1.267 million tons, up 6%, and China's output was about 690.7 million tons, up 21%, and China's welding steel pipe production accounted for 55% of the world's welded steel pipe production.

However, as a major country in the steel pipe industry, China's steel pipe industry is a big shortboard in upgrading and upgrading, and the structural contradictions in the industry are prominent. It is pointed out that the steel pipe industry in China has the following problems: firstly, the demand of the market falls and the contradiction of excess capacity is outstanding. Second, the industry benefit is seriously declining, the seamless steel pipe production enterprises are particularly outstanding; Third, unfair market environment aggravates vicious competition; Fourth, the ability of independent innovation is not strong; Fifth, we need to further enhance the competitiveness of the industry in terms of internationalization.

With the supply-side structural reform and the 13th five-year plan, the depth adjustment of the steel pipe industry has been gradually rolled out. It is reported that the steel pipe industry in the 13th five-year plan period, the steel pipe production control is within 100 million tons, the seamless steel tube of 28 million tons, welded steel pipe 72 million tons; In the end of the 13th five-year plan period, through the promotion of merger and reorganization to form 3-5 international competitive steel pipe enterprises; Main energy and environmental indicators meet the national iron and steel industry in 2020 green development goals and objectives, industrial dust, comprehensive industrial wastewater discharge standard of industrial solid waste comprehensive utilization and safe disposal of dangerous wastes rate of 100%; The quality stability and reliability of the products have been greatly improved, and a number of key pipe varieties have been effectively supplied. The development of steel pipe industry in China is progressing steadily.

There is pressure to improve quality

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With the supply-side structural reform and deep integration of the industry, the listed companies in the industry are also facing the adjustment of the business and the enhancement of quality. Data show that in general, A shares many of the steel industry listed companies there are many steel pipe related business, it has A steel tube business as the optimization and upgrading of the steel industry reform and further some pure to steel pipe products as the main revenue adjustment pressures faced by companies is relatively obvious.

Yulong shares, for example, the data shows, the company is specializing in the production of oil, gas, water and the comprehensive production of large steel structure with steel pipe manufacturer, one of the nation's largest private welding steel pipe manufacturing enterprises, the main business is welded steel pipe production and marketing. In the first half of 2017, the domestic steel pipe industry is still in the production capacity cycle, the product homogenization competition is fierce and the profit space is further squeezed. Upstream raw material prices remain at a higher price range, rapid rise in frequency, led to increasing steel pipe products offer invalid and destroyed single, did not see the downstream demand rebounded significantly, weaker industry overall situation.

In the first half of 2017, the domestic steel tube market experienced negative growth. The output of welded steel tubes reached 3215.2 million tons, down 6.74 percent year-on-year. Overseas markets, due to the frequency of domestic steel product prices quickly, export price advantage is gradually weakened, together with the international market in 2017 with China steel tube anti-dumping is relatively serious, still present export "quantity price rise" in the first half of the steel pipe. In the first half of 2017, the total volume of steel pipe exports was 415.28 million tons, down 7.76% year on year. The average export price was $923.21 / ton, up 8.63% year on year. Facing severe market environment, yulong shares in 2016 for part of the traditional pipeline business integration and stripping assets, and natural gas assets, on the one hand, on the company's assets and liabilities structure and the main business is optimized adjustment, on the other hand also increases the company reserves.

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Also, as a professional engaged in welded steel pipe products r&d, manufacturing and sales of high-tech enterprises, large galvanized steel pipe, spiral welded pipe in our country and inspecting &controlling supplier of jinzhou pipes are also facing the pressure of the industry.