How to look at Tianjin steel pipe in 2020

It would be destined to be extraordinary in 2020. Why? Since we entered into a new year of 2020, we are suffering a worldwide epidemic so far, which has made great influence both in our work and life. So does steel pipe industry. Facing such an unexpected challenge, how we look at Tianjin steel pipe in 2020?

Overall, the current worldwide epidemic really has much effect on the steel pipe production around the world. That does not mean we will have a negative attitude towards the whole steel pipe industry around the world in the coming days. On the contrary, Tianjin steel pipe keeps giving a full play to its advantages and takes advantage of the good resources to provide customers with various types of steel products in the global steel pipe market. Especially, steel pipe manufacturers in China try to carry out “dimensional accuracy improvements” that is aimed at the “elimination of cold-drawing” as well as the “workability improvements” that is aimed at the “elimination of heat treatment” in steel pipe manufacturing. Tianjin steel pipe will adjust the production structures in production and adopt advanced technology to achieve improvements involving in low-strain pipe manufacturing, minimizing forming strain during the manufacturing process as well as workability in 2020. In future, it is believed that a seam-forming strain in a positive way will become even more important than technologies for the mere formation of shapes. 

With regard to structural steel pipes, the efficiency of production in small lots has to be enhanced in the current steel pipe market. It is necessary to promote the use of cage rolls as a size-independent technology in the production process, or the application of flexible forming mills to medium diameter pipes. Besides, it is essential to manufacture products suited for the use in specific environments, and even to improve the technology applied to adding various working at low costs. Furthermore, with the complete series of steel pipe production equipment, as well as the professional and experienced personnel, cold rolled steel pipe is committed to meeting the customer's various practical application needs so far. Moreover, it does matter that Tianjin steel pipe manufacturers should have an objective and rational analysis of the current steel pipe market considering the special conditions and potential factors in the steel pipe industry, and then make reasonable production strategies to meet the needs of customers as much as possible.

The growth rate of China’s steel demand will fall in 2020

Looking forward to the Chinese steel market demand situation of structural steel pipe in the New Year, its total consumption continues to be robust, there is still room for growth after the step of 1 billion tons, but due to a variety of factors, the demand growth rate will be significantly reduced. According to preliminary estimates, China's total crude steel demand is expected to exceed 1.03 billion tons in 2020, an increase of more than 3% and at least 3 percentage points lower than the growth rate in 2019. The apparent consumption of crude steel in China is about 960 million tons, an increase of more than 4%.Crude steel exports (converted from steel exports) about 70 million tons.

In 2019, China's total demand for steel (including exports, the same below) is growing strongly, with crude steel approaching or reaching 1 billion tons.After jumping to this new level, China's steel demand volume of mild steel tube will expand. China's total crude steel demand is expected to exceed 1.03 billion tons in 2020, an increase of more than 3%. China's steel and steel demand continued to grow in the New Year, mainly driven by three forces: First, investment in fixed assets, especially infrastructure investment to "strengthen weak links", is growing rapidly. Downward pressure on the domestic and foreign economies will still exist in 2020. To this end, policy makers will strengthen counter-cyclical adjustment and focus on stimulating end consumption and "shoring up weak spots" fixed asset investment. Since 2019, relevant departments have repeatedly "cut interest rates" in a disguised way, launched large-scale issuance of ultra-long-term local government bonds, and reduced taxes and fees. At the same time, real estate investment is still running at a high level, and overseas funds are accelerating their entry. Therefore, it is expected that the growth rate of national fixed asset investment, especially the growth rate of infrastructure investment, will increase in 2020, which will generate more steel demand such as China hollow section tube.

Second, foreign trade exports are likely to improve. The rise of global trade protectionism in 2019, especially the "trade war" initiated by the US trump administration, has already harmed global trade and economic growth, including the US itself facing the risk of economic recession. In order to get out of the recession crisis, the "trade war" is likely to be temporarily suspended within a New Year. Moreover, major countries in the world have started a new round of monetary easing. While cutting interest rates, they have resumed QE one after another and coordinated with proactive fiscal policies. The federal reserve has also cut interest rates twice in a row. As a result, global economic growth of galvanized steel pipe is expected to recover in 2020.

unswervingly pursue innovative development in pipe industry

Miao changxing said that in order to achieve high-quality economic development, China must have high-quality manufacturing industry as a support. Innovation is the "cow nose" of high-quality development of manufacturing industry. He pointed out that in recent years, with the completion of the work of reducing overcapacity of mild steel tube and cracking down on "floor steel", the supply system of the steel industry has been further optimized, but there are still many problems such as weak independent innovation ability, low level of green development and low value-added products.

Miao changxing believes that only by relying on technological innovation ability to create new engines of development, foster new drivers of development and create new space for development, can the steel industry continuously improve quality and efficiency, transform and upgrade, and move to the middle and high end of the global value chain. The innovation and development of steel industry should focus on the following four aspects: First, we will strengthen the dominant position of steel pipe suppliers in technological innovation. First of all, we should improve the system and mechanism of technological research and development in the leading industries of enterprises, promote the flow and accumulation of innovative elements such as technology and talents to enterprises, and promote the improvement of technological research and development system and system construction of enterprises.

Secondly, we should establish a reasonable research investment mechanism, actively mobilize the strength of all aspects, and gradually establish a research investment mechanism with government investment as the guide, enterprise investment as the main body, and social capital as the supplement. Second, we will increase research and development of key generic technologies. With the demand of the current national economic development, suppliers should focus on solving a number of key technologies, solve the bottleneck in the development of the production of structural steel pipe. Third, we will strengthen the building of an innovative talent pool. We should establish a multi-level talent training system, focus on training leading and leading talents, and constantly improve the incentive mechanism to encourage innovation, so as to fully mobilize the enthusiasm of scientific researchers.

Fourth, we will actively develop an industrial-oriented patent layout, form a number of patent portfolios in key core technology areas, and build a reserve of intellectual property rights to support industrial development and enhance the competitiveness of enterprises. We will further cultivate ability of hollow section manufacturers to apply intellectual property rights, industrialize their innovative achievements, move up the industrial chain and cope with international disputes.

Multiple departments speed up the disposal of unqualified enterprises

The central economic work conference called for steady progress in weeding out the unqualified steel pipe manufacturers, speeding up the disposal of "zombie enterprises" and formulating exit measures. According to the work process of ministries and commissions, steel, coal and other industries are accelerating the disposal of "unqualified enterprises". Last November, for further promoting the structural reform of the supply side , some institute like the national development and reform commission, ministry of industry and information technology issued a notice to production enterprises for the disposal work. This notice further defined the disposal principle, the scope of disposal, treatment, disposal process and time, etc. In addition, the purpose of this public notice also include effectively guarding against enterprises to resolve the debt risk, boosting transfer efficiency of economic mass.

The important way to update development of the economy is steadily pushing forward the enterprise evolution. However, how to realize the evolution of hollow section manufacturers? It depends on the steel pipe market. Therefore, it is very important to create a fair competition environment and further strengthen the fundamental position of competition policy. From the current situation, it is more rely on the power of the market.

An executive director of a technology research institute said that speeding up the disposal of "zombie enterprises" has two roles. First, reduce inefficient supply, reduce overcapacity and accelerate the market clearing process. Second, they will optimize the stock of resources, increase the efficiency of resource allocation, and release a large amount of precipitated resources. These resources include tangible resources such as people, property, goods and land, as well as intangible resources such as entrepreneurship and market vitality. Of course, the short-term pain of dealing with "zombie enterprises" is inevitable. The key for China steel tube manufacturers is to stick to clear principles, use appropriate means and set rational goals. In principle, suppliers should adhere to the guidance of the government and rule of law. In terms of means, the standard of "zombie enterprises" should be defined, and different degrees of "zombie enterprises" should be classified.

The time and scope of the target should be well defined, and it is not easy to go too fast. In addition, there are many "zombie companies" in construction materials, commercial trade and real estate. In order to complete all the disposal work by the end of 2020, there is no doubt that the disposal will be intensified this year. The disposal work also include unqualified pipe production like the production of black steel pipe as raw material is very important.