Industry incorporation of steel pipe industry

There are many iron and steel enterprises in our country, but the concentration degree has been at a low level, which seriously restricts the high-quality development of our iron and steel industry. As China’s economy enters the transition period, the steel industry also enters the adjustment period, and the speed of mergers and restructurings is changing the ecology of the steel industry.

Baosteel shares said that next year’s profit trend mainly depends on the purchase and sale market of square steel pipe, upstream and downstream supply and demand changes. Recently, the coking coal price rose rapidly and sharply, which brought great pressure to the company’s cost. The company tried to reduce the coking coal cost through the optimization of coal mixing structure.
It is the general trend to promote the merger and reorganization of iron and steel enterprises in our country from the perspective of global merger and reorganization cycle, internal law of iron and steel industry and enterprise development demand. On August 21, 2020, Shanxi Provincial State-owned Capital Operation Company and China Baowu Iron and Steel Group signed a strategic cooperation framework agreement to promote the joint restructuring of TISCO Group and China Baowu, which is another major decision after Baowu completed the restructuring of Masteel and Heavy Steel.

On July 14 this year, Shandong Iron and Steel announced that the State-owned Assets Supervision and Administration Commission of Shandong Province is planning with China Baowu Iron and Steel Group Co., Ltd. for the strategic restructuring of the Shan Iron and steel Group especially for the rectangular hollow section. August 20, Anshan Iron and Steel reorganization meeting was held, Anshan Iron and Steel started the reorganization of Benshan Iron and steel. In mid-September, Shougang planned to buy controlling shareholder Shougang Group’s 49 per cent stake in the steel trading company through a share issue.

In the face of the complex external risk environment, steel enterprises in addition to training internal strength, tap the potential to increase efficiency, the steel industry through mergers and acquisitions, improve industry concentration, is also a development path. On November 1, Baosteel shares repeatedly mentioned mergers and acquisitions to expand the scale. Integration and reorganization is one of the key directions for the high-quality development of the iron and steel industry. Baosteel will fully grasp the opportunity of China’s iron and steel industry merger and reorganization, increasing concentration for mild steel tube.

Everbright Securities research report shows that industry merger and reorganization accelerated, the concentration of steel enterprises will be further improved in the fields of black iron steel pipe, the profitability of the steel industry will be significantly improved in the future, and the profitability of listed companies is expected to be further improved.