Steel pipe price will move down in this year

Analysts believe that domestic pipe demands for cold-formed hollow sections steadily decline and steel prices is expected to move down. Some expert believes that he theme of the domestic economy in 2019 is contraction rather than expansion, and with the debt pressure gradually increasing, what has emerged this year is only an improvement in marginal liquidity rather than a complete restoration of overall credit. The slowdown trend of the domestic economic will remain unchanged. Consumption continues to decline, indicating that demand is in continuous weakness. Consumption is constrained mainly by the dual effects of lower income brought by lower corporate profits and higher expenditure after rising debt levels. The contribution structure of investment, consumption and net export to economic growth has changed. Weak external demand and trade friction have affected foreign trade, diminishing marginal utility of investment and restricted consumption.

Domestic steel demand for China hollow section tube is expected to fall by about 20 million tons in 2019 compared with 2018, due to the impact of restrictive policies, cooling land market and declining consumption growth. According to the reporter, since November 2018, the spot price of the varieties of black industrial chain has declined as a whole, and steel is still the core factor affecting the prices of the upstream and downstream varieties of the industrial chain. In the future, the profit of the industrial chain continues to go down, and the profit turning point may appear around August. The steel and coking profit both show obvious contraction.

In 2019, domestic crude steel output will exceed 950 million tons, an increase of more than 20 million tons year-on-year, while demand will decline by about 20 million tons. In fact, as the export market is not smooth environment, steel pipe suppliers and terminal steel inventory will gradually pick up. According to analyst, the actual reduction of iron ore production caused by the accident in vale is around 50 million tons and domestic supply will still fall slightly. Affected by capacity reduction and limited capacity under construction, domestic coking coal supply is low, and domestic coking coal output may continue to decline in 2019. It is worth mentioning that the supply of primary coking coal has not intensified. The price difference between primary coking coal in shanxi and gas coal in shandong has shrunk. For the arbitrage of black industry chain, China steel tube factories believe that the risk exist in downtrend of steel pipe price.