Steel Price Forecast & Steel Industry Outlook in China
Generally speaking, steel industry all along tends to present a dynamistic character in this sector. Steel as global commodity, it is subject to a number of varying factors from overall aspects, which is particularly reflected in steel pipe prices. Based on China Iron & Steel Association, Chinese current steel consumption fell 5.7 percent to 591 million tons in the first 10 months of the year. Throughout the global steel market, oversupply can explain steel prices dropping in 2015 from one respect. China, the largest producer in the world, is responding to the market in the way of exporting large volumes of steel. Meanwhile, the price of iron ore, a key raw material, fell below $50 per metric ton in the first half of 2015, which also somewhat prompted steel pipe manufactures to keep operating rates high.
On the other hand, the steel industry in China has evolved for more than quite a few years in the world market. According to some official data, China represented more than 50% of world steel production in 2013. Steel and iron ore prices are constantly fluctuating because they are at the mercy of the industries they serve. In recent years, steel has been riding the roller-coaster of volatility, plummeted, reaching historical lows in 2015. From one thing, it has been driven by national comprehensive modernization. For instance, more and more steel pipe producers tend to manufacture various cold rolled steel pipe sizes per as diverse product standards to cater to different customers, which to some extent, promote the steel industry advancement in future.
Today, China is faced up with a great shift towards national economy and structurally make somewhat adjustment to the waves in the steel industry. At present, with the economy developing at the slowest pace in six years and demand contracting at home, the excess limit is hitting at critical levels, though China’s steel factories have hinted to slowing down production. Furthermore, welded steel pipe products structure adjustment has entered a crucial stage. In recent years, domestic welded steel tube variety structure adjustment has made great achievements, and export product varieties are also getting constantly improved, the localization rate and export quantity of oil well pipes rapidly improve. However, we have to realize the fact now that steel pipe exports in China still face a bottle-neck issue of exporting large quantity with lower price but importing small quantity with higher price.
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