A Brief Discussion on the Market Prospects of Spiral Welded Steel Pipes

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2022-05-16

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Looking at domestic spiral steel pipe production capacity, output has remained at a high level since January this year. According to data from the National Bureau of Statistics, in the first quarter, national spiral steel pipe production totaled 127.44 million tons, up 1.4% year on year, while crude steel production reached 144.73 million tons, an increase of 2.8%. Since April, despite repeated declines in domestic spiral steel pipe output, major manufacturers have announced production cuts or maintenance shutdowns; nevertheless, overall production continues to rise compared with last year. The National Bureau of Statistics reports that in April, spiral steel pipe output stood at 52.915 million tons, up 2.6% year on year. These statistics indicate that spiral pipe producers are implementing production reductions and output restrictions.

　　From within the country Spiral steel pipe From a production standpoint, spiral steel pipe output has remained at a high level since January this year. Data show that in the first quarter, national spiral steel pipe production totaled 127.44 million tons, up 1.4% year on year, while crude steel output reached 144.73 million tons, an increase of 2.8%. Since April, despite repeated declines in domestic spiral steel pipe prices, major producers have announced production cuts or maintenance shutdowns; nevertheless, overall output continues to rise compared with last year. April’s spiral steel pipe output stood at 52.915 million tons, up 2.6% year on year. Statistical analysis indicates that the production‑cutting and capacity‑restriction measures adopted by spiral pipe manufacturers have been more bark than bite, with only modest effects on reducing output.

　　Affected by the global economic downturn, overseas demand for spiral steel pipes remains weak. Meanwhile, high domestic prices have eroded their international competitiveness, severely curtailing China’s spiral steel pipe exports. According to the latest customs data, April exports totaled 1.41 million tonnes, down 260,000 tonnes from March and 70.5% year on year. From January to April, cumulative exports reached 6.55 million tonnes, a 59.5% decline compared with the same period last year.

　　According to statistics from the National Power Dispatch Center, during the first ten days of May, the nation’s average daily electricity consumption declined by approximately 4.3%. Earlier, in early, mid, and late April, year-on-year declines were 3.6%, 4.3%, and 3.6%, respectively. Given that industrial electricity consumption accounts for roughly 75% of China’s total electricity usage, the drop in overall demand suggests that the economy has yet to fully recover, and demand for spiral welded steel pipes remains below expectations.

　　In summary: On the supply side, steel production capacity has yet to be effectively curbed, and the recent decline in market supply is likely due to steel mills restricting shipments. On the demand side, although we are currently in the peak season for steel consumption, the domestic economic recovery has fallen short of expectations amid the global economic crisis, thereby dampening steel demand. Market observations indicate that while steel demand has shown some improvement recently, it still lags significantly behind last year’s levels. Coupled with an unfavorable international environment, exports remain severely constrained. Accordingly, the author believes that the recent sustained rise in steel prices does not herald a genuine rebound in steel market demand; any recovery in demand will continue to face substantial risks.

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