Overcapacity Of China's Steel Industry, Thus Resulting In Vicious Competition Within The

Research on the issue of steel, industry associations

, domestic steel companies than the consensus view is that in recent years, rapid expansion of China's steel output, there has been a serious overall excess capacity and structural excess of imports and exports have crowded the market, this is my pipe frequently subject to "double reverse" the main reason for the investigation. Some enterprises have called for China's steel production capacity constraints must be as soon as possible, according to the present situation continues, the future of China's steel industry is likely to run into more difficult situation.

China's steel industry is divided into two major categories of welded steel pipe and seamless pipe. In recent years, the rapid development of steel industry, on the one hand to allow domestic steel enterprises in technology, quality, production level has risen markedly, but also makes the new investment has continued to enter the property to the rapid expansion, resulting in a surplus of the current steel production.

This reporter learned that, due to hot the market a few years ago, local enterprises have invested to expand seamless steel pipe production capacity, although affected by the financial crisis, the international and domestic market demand declined sharply, under construction or newly constructed production line has been unable to dismount, China's seamless Steel production capacity still further expansion.

Panzhihua Iron and Steel Group Chengdu Iron & Steel Co., Ltd. Zhong-language market management minister told reporters that the company in 2008 was the relocation of transformation, transformation of a single investment unit this year, rolling seamless steel pipe production, increase in production capacity by 20 million tons. Hunan Valin Hengyang Steel Tube Group Marketing Director Wu Jun said the company's 2008 investment in building power stations of 720 large-diameter thick-walled tube production line in July 2009 formally put into production, design capacity of 150,000 tons.

China Steel Pipe Association, who declined to name the person in charge, as in previous years a high level of overall profitability of seamless steel tubes, stimulated in some places and some companies have launched new projects, leading to overcapacity, oversupply . Based on this trend continues, by 2010, China's steel industry, total capacity will exceed 60 million tons, exceeding 15 million tons more than the actual demand.

Reporter study found that over recent years, steel production capacity is not only surrounded by flowering, rapid expansion, but also a prominent tendency toward the homogenization of the structural surplus is very serious.

China Steel Pipe Association relevant person, to the oil pipe seamless steel pipe products, for example, China's current oil well pipe production capacity has reached 8.5 million tons, accounting for about 2 / 3, 2008 actual output 6.67 million tons, of them being in the oil, Sinopec, CNOOC and extending the four major oil consuming a total of 2.78 million tons of domestic oil pipes, as well as dependent on exports of up to 3.99 million tons, the overall production surplus of oil well pipes nearly 200 million tons. By the financial crisis affecting the international oil prices plunged in 2009, China's export of oil well pipes are expected to fall to 200 million tons, consumption of the domestic market fell to 250 million tons, the amount of excess production capacity will reach 4 million tons, accounting for about half of total capacity.

The condition of anonymity say the market capacity of seamless steel pipe and pipe little too fast export growth, particularly in backward production capacity also the herd phenomenon compete for export of resources is bound to be problems. The seamless implementation of the United States against China, "double reverse" is also due to imports from China, too, under normal circumstances, stocks should be in 5-6 months, while the current U.S. inventory of oil well pipes are more than 300 million tons, the need 6 months to digest to normal levels, which is why the United States International Trade Commission this year, China's oil pipe when the threat of injury to a vote, there have been six members unanimously voted in favor of the rare cases.

The herd phenomenon caused by excess capacity, the surface affected by the loss of the enterprise itself, and ultimately a loss to the industry as a whole. Such as seamless steel pipe in the oil drill pipe, the original demand was not large, the world only a few enterprises. 2006 investment in a company plant in Jiangyin, because oil prices climbing higher and higher, was quite effective, then this county there are four private enterprises launched the oil drill pipe project, a county close to the original capacity of the total world output, and now these new on the private enterprises have been discontinued.

Valin Hengyang Steel Tube Company Wu-jun told reporters on the market is now seamless between domestic firms of overcharging is rampant and many foreign customers, holding the price of other domestic manufacturers directly to the company bargain, companies will only reluctantly give up these customers.

Anshan Iron and Steel Co., Ltd. director Wang Feng said, Anshan Iron and Steel Production Line 4 capacity with 75 million tons this year, the actual capacity of 1-10 months less than 33 million tons, is expected to cut 50% of the year. "The more cuts, the higher the cost of production; the cost of the higher, the more cuts, companies caught in a vicious circle, this year has been a loss of 3 million yuan. Now the price of oil well pipes have been unchanged or even lower than the average price of seamless steel tubes, so that bargain between the situation persists, the seamless steel pipe industry will face difficulties. "

Overcapacity Of China's Steel Industry, Thus Resulting In Vicious Competition Within The

By: ryyy

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