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Main Factors for A Down Trend in China Steel Pipe Market Prices

Source: Bofa Valve Company   Author: Bofa Valve Company   Posted: 2013-09-16 14:37:43   Hits: 737
In the general background of the international financial crisis and the stage of China economic development,China economy has appeared a trend in a slow growth. In the period when the steel pipe market entered into high consumption and low growth, the contradiction between an economic longer-term trend in falling back and  many years of business development model for the steel pipe market added more risk and hardship to the steel pipe market.Steel enterprises and steel merchants have experienced 6 years of economic crisis and a heavy suffering from twice periodic interpretation of commodity prices up and down.


Since this year, the weakness of world economy has increased a decline in commodity price except for petroleum, which reflected the gravity of world economic situation. Although the weak international economy still shocked around the trough of the crisis,there was no big change in the fundamentals of crisis, and the world economy was still in the regulation period of a deep shock. The international market steel price also shocked in trough.


The main factors influencing a down trend in China steel pipe market prices are a rise in steel prices before the Spring Festival and a increase in social inventory.In the wake of the continuous decline in the economy after the Spring Festival,it rendered again the steel pipe market experience the pressure of prices constantly falling down.The screw thread steel prices in Tianjin market fell  from 4160 yuan / ton before the Spring Festival down to 3330 yuan / ton. HRC price from 3960 yuan / ton, down to 3380 yuan / ton. The price falling by 600 yuan rendered the heavy losses to steel trading businesses that increased inventory before the Spring Festival. In the first half of 2013,due to be suffered from the double pressure from high iron ore cost and the decline in market steel prices,the steel pipe industry only got average return on sale of 0.13% and is in the floor level of China industries. Many steel enterprises has been at a loss of management position.From this it lets us once again see the security of iron ore international industrial not only a strategic problems in steel pipe industry, but also a security strategy of the national industry.


Many people see the importance of China further reformation on the future development of China economy and society, but neglect that maintaining economic stability is both the inherent requirement of socioeconomic development and the basic economic conditions of  reform. Too much emphasis on never introducing the pump priming is as a result of the fact that China economy has almost fell back along the same slope this year, and gets the enterprises into trouble.


In July 2013 , the CPC Politburo Economic Working Conference proposed to control the correct economic development ideas of the overall economic plan "steady growth, adjusting structure, promoting reform". China economy has removed interferences of public opinion of the so-called non pump priming, ending the hard course of a constant fall in the economic growth,going on to ensure that the economy can operate stably in a reasonable range of growth, accelerating the reform and structural adjustment, and promoting social economy into a path of the comprehensive,coordinated and healthy development.After affected by the central regulatory policy,the manufacturing MPI reflecting economic boom has picked up for two months in a row,reaching 51% in August,up 0.7 percent point over July.


China economy that again stops fall to stabilize has brought hopes to the steel pipe market in trouble As of late August, Tianjin HRC price rose to 3580 yuan, thread steel pipe prices also to 3660 yuan.It makes the steel pipe mills and merchant finally out of the woods.The steel pipe market  finally  break away from the periodic sharp rise and fall in prices.