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Analysis of the difficulties faced by China's seamless steel pipe industry
DATE:2015-07-31 10:07:30 Reading :

[Abstract]
Kept under the pressure of the economy, and the international crude oil prices fell sharply, this year 1-5 month seamless steel pipe production and export volume fell. To the rail based expand domestic demand of infrastructure projects, the non energy products as the main welded pipe market demand favorable; and international oil prices imploded, and to increase hydropower, wind power and other green energy demand, market atrophy of energy products are the main seamless steel pipe business, steel pipe industry in output growth appeared polarization. Steel pipe industry transformation and upgrading will be a slow process.


Keywords steel tube industry polarization structure adjustment and transformation and upgrading
1, the economic downward pressure on the steel pipe industry and the industry as well as the seamless steel tube industry

Currently published in June 2015 HSBC China manufacturing PMI (Purchasing Managers Index) and final value of 49.4 below 49.6 market expectations, slightly higher than the 5 month end value 49.2, but the numerical continuous 4 months below 50 line ups and downs. June output index rebounded slightly, new orders and new export orders index back above 50; but the manufacturing industry continued attrition, resulting in the employment index fell to 46.6, to its lowest level since February 2009. In addition, in May the total industrial product price index (PPI) fell by 4.6% year on year, has been a continuous decline for 39 months, the metallurgical industry PPI has declined for 43 consecutive months.
2015 1-5 month China's production of steel 459970000 tons, an increase of 2.2%, compared with the same period last year growth rate down 11480000, of which 3.87% tons of seamless steel pipe production, down 6.5%, compared with the same period last year fell by 9.97%. June steel prices accelerated decline trend, as of June 26th, the composite price index of steel 67.66, of which the flat material is 68.24, the long material is 67.71, seamless steel pipe is only 65.60.
May, the scale of industrial enterprises profit of 520710000000 yuan, an increase of 0.6%, the growth rate slowed down 2 percentage points over the first 5 months of this year, the total profit of industrial enterprises fell by 0.8%, a decline of 0.5 percentage points over the previous 4 months, including black metal smelting and pressing industry profits fell by 11.5%. In the first quarter of 2015, China Steel Association statistics 101 iron and steel enterprises loss 9.87 billion yuan, compared with the same period last year reduced losses 70.39%, of which the main business profit for -110.53 billion yuan, an increase of loss of 45.04%. This showed that a further decline in China's iron and steel enterprises business profitability. Although the iron ore price decline brought about by the decline in iron ore costs about 500~550 yuan / ton, but the price of steel fell by about 700 yuan / ton. Due to the low market capacity of high-end products, the homogeneity competition is more intense. In this climate, the steel industry is also true, which has encountered unprecedented difficulties in the seamless steel pipe industry.


2, the steel industry, the steel pipe industry, the production of high speed growth and seamless pipe production decreased significantly
In 2014, 8898 million tons of steel production in our country, 5.44% growth, which 3137 million tons of seamless steel pipe, an increase of 0.19%, welded steel pipe production 5761 million tons, 8.54% growth, seamless steel pipe production has to the platform area of the peak.
Since 2015, China's steel production for more than the speed of China's steel output growth, but steel pipe seamless steel pipe welded pipe and obvious polarization, seamless steel pipe production year-on-year declined, and welding steel pipe production contrarian substantial growth.
May 2015 China's steel output 8070000 tons, an increase of 2380000, of which 9.9% tons of seamless steel production, down 5680000, 6.99% tons of steel production, an increase of 16.1%; 1-5 month production of 36560000 tons, an increase of 3.49 over the same period last year, 11480000 tons of seamless steel pipe production, the growth rate down to -6.5%, welded pipe production 25080000 tons, output growth rate of 18%. Nine varieties of production decline in steel 22 major categories of species, seamless steel pipe production decline after the heavy rail and light rail, ranked in third place, and welded steel pipe production increase after 18.2% of extra thick steel plate, placing him second. Last year, China's steel output growth rate is 5.55%, which is a seamless steel pipe production growth rate of 8.83%, welded steel pipe production growth rate of 3.47%, although the growth rate of welded steel pipe is also higher than seamless steel pipe, but the difference is not big, this year, the two output changes have been a marked trend of differentiation between 24.5%. Seamless steel pipe production, which is the first time in the new century, fell sharply.
As the analysis, this year, China's seamless steel pipe production may be lower than last year's level, is expected to be seamless steel pipe production for the year to 29000000 tons.
3, seamless steel pipe industry is facing multiple pressures
China's large and medium sized seamless steel pipe enterprises are mostly based on oil, natural gas, electric power, coal, gas and other energy industries.

Seamless steel tube enterprises its leading products for the oil well pipe and oil and gas pipes, etc., these would have been the advantages of high product with high technology content and added value, but due to the drastic changes in the market situation makes these enterprise has difficulties.
2014 since the second half of the petroleum and natural gas market of drastic changes, the international market price of crude oil fell as low as $46.83 / barrel, and the original $107.68 / barrels compared to the decline range reaches as high as 56.15%, not only to export the petroleum resources mainly, accounted for the GDP80%-90% Russia, Venezuela and other countries is a heavy blow, the petroleum industry in our country has brought adverse effects. 2014 China's crude oil exploration and development, 210100000 tons of crude oil, an increase of 1.1, the growth rate down 9.5% percentage points; 308380000 tons of crude oil, an increase of 2 over the previous year, the growth rate of 60%, compared with 57% in 2013 increased by about 3 percentage points; in 2014, 123410000000 cubic meters of natural gas, an increase of 2.2, down 0.6% percentage points. According to the steel pipe branch is expected in 2014 domestic oil well pipe consumption fell by 15-20%. 2015 oil well pipe consumption may further reduce, such as the Daqing oilfield in 2015 to reduce crude oil production 1500000 tons, will reduce the amount of oil well pipe. The state-owned large seamless steel pipe enterprise, which is mainly produced by the production of oil, has a sharp decline in the demand for the domestic and foreign markets. China's oil system is well known in the past 1-2 years, the construction of oil and gas pipeline project is delayed, and the exploration and exploration in oil field is natural, which is the non - technical factors make the market demand of oil well pipe. This, of course, is a temporary factors, however, from a long-term point of view, the Daqing Oilfield reserves approaching at a later stage, onshore oil and gas fields can be recoverable reserves by Erdos oilfield as the main force in the high yield; offshore oil and gas mining by offshore continental shelf to deep sea gradually transfer; although the land reserves of shale gas is rich in, but after a large number of mining formation scale need days.
3.2 boiler tube market shrinkage of seamless steel tube cold thinking
2015 1-5 month in the national absolute power generating capacity of 2218700000000 kwh, an increase of 0.2%. Among them, the absolute power generation capacity of 1739300000000 kwh, an increase of 3.1%; the absolute power generation capacity of 318200000000 kwh, an increase of 11.5%; nuclear power, wind power increased by more than 30%.
From environmental protection needs and prevention of air pollution and other reasons, in recent years, thermal power investment decline, while the rise of green energy investment. 2014 8, 9 month, national development and Reform Commission has approved the Wuling Power White City hydropower station engineering and Yalongjiang Lianghekou Hydropower Station project; at the same time, the steady development of wind power, according to the published August 2014 national offshore wind power development and construction scheme to build 44 offshore wind power plant, the current in Fuqing, Fujian in start construction four wind power plant. The state has decentralized power and large hydropower stations outside the approval of all power generation projects, and the wind power, photovoltaic based new energy projects, because of the support of policy subsidies, some areas even if the power is still in the layout of the layout. Above wind power, hydropower and photovoltaic power station does not use seamless steel tube boiler tube. And the use of seamless steel tube boiler tubes of coal and electricity projects under strict control, the national development and Reform Commission in June 2014 approved the Hebei Datang Weixian County power plant construction projects, the total investment of 6220000000 yuan. Relevant data show that the large thermal power plant in accordance with the provisions of the need to install desulfurization, denitrification and removal of dust equipment, removal rate of 90% or more. Currently China's three major Boiler Factory: Dongfang, Harbin Boiler and boiler, due to shrinking market, the vast majority of boiler manufacturing enterprise is not better than. The new speed of thermal power projects is gradually reduced, the demand for high pressure boiler tubes is shrinking.
Nuclear power is a green energy, China is currently building 25 nuclear reactors, and the world is building nuclear reactors only 68, not only China, but also in the world are facing energy transformation, to prevent the air pollution caused by coal smoke suction road disease. China now has only 2% of its 24 nuclear reactors from 17 nuclear power plants. Plans to build a nuclear power station has been built and the construction is expected to contribute 10% of the share of electricity. Since the Fukushima nuclear accident in Japan, the nuclear power plant in inland nuclear power has become the focus of attention, while the country has adjusted the development of nuclear power.
Such as the, the development of China's energy construction projects, the potential of further development of Hydropower Resources Co., due to the ecological balance of the environment constraints, the prospect of the development of thermal power by environmental protection norms, the growth rate is on the decline; nuclear power station in the inland site safety such as how to ensure are studied; the development of wind power and solar energy is not affected by the effect of external factors, such as environmental protection and safety problems, but the energy construction and development of boiler tube has nothing to do. This is the state-owned seamless steel pipe company for the boiler tube market prospects, should be a cold thinking.
3.3 basic construction investment in the country is good for the growth of steel pipe and other civilian pipe
Gross domestic product in the first quarter of 2015 grew by 7%, a record low of 6 years. Analysis of the first five months of this year China's electricity consumption of the whole society, the railway cargo volume, and bank long-term loans are considered to be observed economic trend barometer of the three major indicators, although the signs of recovery, but the foundation is not solid. Used by the whole society electricity consumption up to 1.6 percent growth rate in the same period of the calendar year is only good in after the outbreak of the international financial crisis in 2009 and the number of power generation in the same month according to the zero growth; railway freight volume may is down 11.

Non seam steel pipe enterprises in the face of heavy pressure from many aspects, only the initiative to adapt to the new normal, focusing on structural adjustment and enterprise restructuring and upgrading, innovation driven and quality oriented development of the road. But structural adjustment and transformation of L level is not an overnight thing, but it is a long and arduous process, government, industry and enterprises must do long-term psychological preparation and careful strain measures. For example, large-scale thermal power as long as do a good job of environmental protection, due to the decline in coal prices, economic and security is feasible, governments on energy policy to adjust the space, in the oil, increase efforts to develop offshore oil and gas, policy is the energy while maintaining stability of the important measures. In short, the structure of the whole, the government "toolbox" there are a lot of tools to reserve. Enterprises should follow up in time.

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