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China’s steel pipe market eyes 2014 gains

Keywords: Tags  steel, steel pipe, China pipe, China Steel Pipe Association, China Metallurgical Industry Planning and Research Institute, Zhong

SHANGHAI — China’s steel pipe market will see improved fortunes in 2014 amid steady economic growth and increased demand, according to Zhong Xidi, secretary general of the China Steel Pipe Association.

"Beijing is aiming for stable economic growth, and this will ensure steady development in downstream pipe consumers, boosting demand for steel pipes," Zhong told delegates at a recent conference in Shanghai.

He pointed to a forecast by the China Metallurgical Industry Planning and Research Institute that the country’s steel consumption could reach 715 million tonnes in 2014, up 3.2 percent year on year, with major pipe users—including the auto sector—seeing up to 8-percent annual growth.

There also could be a small expansion in overseas trade, given the relatively low Chinese pipe prices, Zhong said.

However, this doesn’t mean that the market will see a fundamental change in the short term, as the pipe sector, like China’s steel industry in general, is still oversubscribed, he warned.

"The capacity utilization rate of steel pipes, especially seamless pipes, is below reasonable levels, which signals severe overcapacity," Zhong said.

China’s seamless pipe capacity was more than 42 million tonnes in 2012 with a utilization rate of only 67.14 percent, far below the 75-percent bottom line.

The country’s overall steel pipe capacity has exceeded 100 million tonnes as of late December. Production reached 75.95 million tonnes in 2012 and is estimated to hit 80 million tonnes this year, according to CSPA figures.

A version of this article was first published by AMM sister publication Steel First.

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