It is imperative for pipe merger and reorganization

Industrial concentration is the decisive factor to ensure the stability of the market. Large dominant steel pipe suppliers based on high industrial concentration determine a country’s economic competitiveness. As a large country in the world, many problems in the industry are related to the low industrial concentration.Experts in the industry believe that at present, the world’s fifth large-scale steel merger and reorganization tide is rising in China, objectively “big steel enterprise era” has come. In order to improve the industrial concentration for the purpose of the merger and reorganization, it has become the inevitable choice of steel enterprises. Industrial concentration is the decisive factor to ensure market stability and balance between supply and demand.

According to the research of foreign experts, if the industrial concentration ratio of the top four enterprises in a certain industry is less than 40%, excessive competition will appear in the market, and the relationship between supply and demand of rectangular hollow section will fluctuate greatly accordingly. America’s four biggest steelmakers account for 65% of the country’s output, compared with 75% in Japan and 73% in the European Union.The top two steelmakers account for 85 per cent of the country’s output, with posco accounting for 65 per cent. In these countries, when the supply of steel exceeds the demand, it can be rebalanced by capping production and coordinating prices, and prices will not rise or fall dramatically.

Song jijun, vice secretary general of China metallurgical chamber of commerce and vice President of hebei metallurgical industry association, said that hollow section manufacturers with high industrial concentration and large scale also determine the economic status of the whole country. Both industrialized countries and newly industrialized countries have a number of competitive enterprises supporting their national economies, especially those with high industrial concentration and large scale, which are not only the trump card and main force of the industry, but also the guarantee of national economic strength and international competitiveness. Supported by SONY, Toyota and Nippon steel, Japan has become a world economic power. The economic competition among countries should focus on the “key minority” of advantageous industries and enterprises. In recent years, China’s steel production capacity of mild steel tube has been reduced, but overcapacity still exists. At present, industry regulation of product prices and excessive competition power is low and redundant construction is still serious, which can’t dominate the international market competition. Under the background of cutting production capacity, the steel industry has come to a new stage where it is necessary to promote the environmental protection management of enterprises, as well as the adjustment of product structure, comprehensive supporting structure of process technology and equipment and industrial layout.