profits in pipe industry improved and downstream demand is expected to increase

According to a report released in the council of the China iron and steel association, steel pipe industry continue to improve with the implementation of the strategic tasks. This solve the excess production capacity of cold-formed hollow sections by 100 million tons – 150 million tons. In the first 11 months of 2018, the total profits of iron and steel enterprises was 280.2 billion yuan, rose as high as 63.54%.
According to the statistics of the securities daily, as of January 14, eight steel enterprises have released the 2018 earnings forecast, and four of them are expected to double the annual net profit of last year.

For the steel pipe industry in 2018, it continued deepening supply side under the condition of structural reform. Anyang iron and steel is expected in 2018 net profit growth of 9.32% to 19.94%, which has realized the product production, and sales income is rising steadily. Chongqing steel expects growth of more than 400 percent in 2018. Shagang (7.550,0.00,0.00%) is expected to achieve a net profit of 1.128 billion yuan to 1.41 billion yuan in 2018, up by 60% to 100%. The iron and steel industry as the pioneer of lateral supply institutional reform, completed upper limit of target in terms of the production reduction of pipe black steel. In this way, the market environment has been significantly improved, the serious overcapacity problem has been effectively alleviated, high-quality production capacity has been brought into full play, and corporate performance has improved significantly.

It is reported that due to good supply and demand connection, steel prices are basically stable in the reasonable range and the steel industry improve the efficiency deeply. In the first 11 months of 2018, many steel pipe manufacturers from China iron and steel association achieved sales revenue of 3.76 trillion yuan, up 14.17 percent year-on-year. Profits and taxes reached 414.9 billion yuan, up 50.14 percent year-on-year. The total profit reached 280.2 billion yuan, up 63.54 percent year-on-year. At the same time, the asset-liability ratio of steel pipe industry decreased.

As for pipe industry situation in 2019, which is more concerned by the customers, experts pointed out that although the economic growth in 2019 will difficult to see improvement in the international aspect, in the domestic aspect, China’s long-term development prospect has not changed, and China is still a large global steel consumption market especially for China hollow section tube. It is expected that key indicators such as investment and new construction area may decline in 2019.