The review of steel pipe market

In 2015, production capacity of China structural steel pipe reached 1.128 billion tons and capacity utilization rate is 71.3%. In 2016, the EU consumption of crude steel was 172 million tons, down 16.9% from 2008. Japan’s consumption of crude steel was 67.5 million tons, down 18.9 percent from 2008. US crude steel consumption was 103 million tons, down 6.4 percent from 2008. At the same time, steel overcapacity in China has aroused great concern. The “internal and external worries” come as China began an unprecedented drive to cut overcapacity in the steel industry in 2016.The steel industry has enjoyed a “good life” in 2018 thanks to the country’s reform policy of supply-side structural.

In February 2016, the state council issued the opinions of the state council on the elimination of excess capacity in the steel industry, requiring that production capacity of the China hollow section be reduced by 100 million to 150 million tons within five years starting from 2016. Since 2016, China has eliminated steel production capacity for three consecutive years that is 65 million tons, 50 million tons and 30 million tons respectively, bringing the total capacity of 145 million tons to nearly 150 million tons. Meanwhile, 140 million tons of floor steel were eliminated in the first half of 2017.

In 2017, in accordance with the decision and deployment of the party central committee and the state council, China’s iron and steel industry deepened the supply-side structural reform and accelerated the transformation and upgrading. In addition, the industry has undergone fundamental changes. In particular, steel pipe manufacturers have made remarkable achievements in tackling overcapacity.

Capacity utilization rate Of China’s iron and steel has been restored through efforts to reduce excess capacity, with the annual capacity utilization rate reaching 76 percent to 77 percent in 2017. China’s severe steel overcapacity has been alleviated. In 2018, the operation and management of the iron and steel industry has seen an unprecedented good situation and the operation performance has been refreshed to a new good historical level. The utilization rate of production capacity has entered a reasonable range. Besides, supply and demand are balanced and prices remain at a relatively high level. Moreover, corporate profits have steadily improved. According to data, from January to September 2018, qualified steel enterprises realized sales revenue of 3.06 trillion yuan, up 14.47% year on year, and realized profits and taxes of 346.681 billion yuan, up 68.2% year on year. The total profit of mild steel tube reached 229.963 billion yuan, which has exceeded the total profit of the whole year of 2017.