Comparative Analysis of Downstream Application Areas of Steel Pipes and Plastic Pipes

April 26, 2019

Author: Suli Lee

As we all know, China's steel pipe steel pipe industry is currently in a serious stage of oversupply. In addition, from the perspective of national policy, the popularity of plastic pipes is increasing, and the living space of steel pipes is being squeezed. However, from the perspective of the market as a whole, due to the country’s economic policy of "steady progress", with the steady development of new urbanization, the country’s investment in infrastructure construction and green energy will increase, including construction, automobiles, home appliances, etc. The demand for steel in the industry will maintain a certain growth. Compared with other steel markets, the steel market still maintains its growth momentum. It is expected that the demand for steel pipe market will increase by about 3% in 2014 and the export will increase by about 5%.

Real estate steel pipe has declined

In 2013, China's real estate market showed a rebound trend. The national real estate development investment was 860.3 billion yuan, a year-on-year increase of 19.8%. It is expected to continue to improve in 2014. The investment in real estate development is 9.8-10 trillion yuan, a year-on-year increase of 15%-17.5%. The newly started housing area is 2.09 billion square meters - 2.13 billion square meters, an increase of 6%-8% year-on-year. Industrial steel accounts for 50% of steel consumption, while real estate steel accounts for more than 50% of construction steel. The steel pipe for real estate mainly refers to the galvanized welded pipe (including fire-fighting pipe) for water gas pipe, about 7 million tons, about 3 million tons of stainless steel pipe and steel-plastic composite pipe, and 1.5 million tons of scaffold pipe for construction every year. The city's water supply and heating pipes are 2.5 million tons. It is estimated that the real estate will use about 14 million tons of steel pipes in 2014, which will drop by 18% compared with 2013.

Mechanical steel pipe has rebounded

In 2013, the added value of industrial enterprises above designated size in China's machinery industry increased by 9.7% year-on-year. The export delivery value of the whole industry was 1,758.543 billion yuan, a year-on-year increase of 2.53%. Among the export growth industries, agricultural machinery increased by 9.8 percentage points, cultural office equipment increased by 8.59 percentage points, and machine tools increased by 7.91 percentage points. The highest growth rate of export value is mine lifting equipment, with an increase of 95.59%.

In 2013, the machinery industry consumed 133 million tons of steel, a year-on-year increase of 4%. It is expected that the national economy will stabilize and rebound in 2014, infrastructure investment will continue to grow, and urbanization will accelerate the pace of industrialization, which will drive the demand of the machinery industry to pick up. At the same time, China's machinery product ownership has reached a large scale, product replacement and maintenance and repair will increase significantly. It is estimated that the growth rate of China's machinery industry in 2014 will be 11% higher than that in 2013; steel consumption will reach 140 million tons, up 5.3% year-on-year; steel pipe consumption will be about 14 million tons, up 12% year-on-year.

Oil and gas pipeline pipe usage is flat

In the case of a moderate global economic growth, the international oil and gas market will show three characteristics of oil demand growth in steadily, oil supply will continue to increase rapidly, and the US dollar will strengthen oil prices. The proportion of natural gas in China's energy consumption is currently 5.3%. It is estimated that China's natural gas production will reach 131 billion cubic meters in 2014, and crude oil production will reach 220 million tons. Increasing the amount of clean energy will make the oil and gas pipeline become the highlight of the steel pipe market demand, driving the rapid growth of steel pipe production.

In 2014, PetroChina will continue to build the middle section of the West-East Gas Pipeline, the Yongtai Link, and the Shaanxi-Beijing Line. The new Xinjiang coal-to-gas pipeline project (including the new Guangdong-Zhejiang Pipeline and Xinlu Pipeline) invested by Sinopec is being launched. Main lines, feeder lines and supporting pipe networks will also be launched. At the same time, the construction of unconventional natural gas pipelines has also begun; new urbanization will drive the development of urban gas pipeline networks and refined oil (gasoline, diesel) pipeline networks. It is estimated that the total amount of pipelines used in natural gas, crude oil, refined oil long-distance pipelines, unconventional natural gas pipelines, urban gas pipeline networks and product oil pipeline networks in the domestic market in 2014 will be 3.5 million tons, and oil well pipes will be 4 million tons (including seamless pipes). 3.2 million tons, 800,000 tons of welded pipes, a total of about 10.5 million tons of oil-specific pipes, roughly the same as the amount of line pipe used in 2013.

The demand for slurry pipeline is a new highlight of foreign trade

In 2013, China's steel pipe foreign trade has made great progress. It is one of the three major steel products (cold plate series, hot plate series, pipe series), and its export focus is Southeast Asia, Middle East and North America. However, due to the obvious increase in trade protectionism, China's steel pipe exports will face more difficulties. Western developed countries such as the United States, the European Union, and Canada have "re-industrialization", and developing countries such as Brazil, India, and Mexico have initiated "double-reverse" investigations on Chinese enterprises to protect local enterprises. According to the statistics of relevant institutions, in the past five years since the outbreak of the international financial crisis, nearly 300 new "being neighbors" trade measures have been introduced. According to statistics, in 2013, there were 17 investigations on trade remedy measures initiated by overseas steel companies in China.

However, the foreign trade situation of steel pipes also has a favorable side. The world oil map is quietly changing. The successful development of shale gas in the United States means that its energy self-sufficiency rate has greatly increased. The demand for dependence on the Middle East oil supply has been weakened. China's CNOOC, CNPC, Sinopec and other enterprises have gained new opportunities for overseas development; the world is unconventional. The development of natural gas has promoted the booming construction of oil and gas long-distance pipelines in many regions of the world. In addition to the pipelines under construction, the planned pipeline length is 143,000 kilometers, of which 75% is natural gas pipelines, and the future world oil and gas special pipeline market remains. There is room for development. At the same time, foreign demand for slurry pipelines is also a new highlight of foreign trade. For example, the X70 steel grade and 18-meter-long slurry welded pipe produced by WIW660 Steel Pipe Plant of Wuhan Gangbei Company of Wuhan Iron and Steel Co., Ltd. was exported to Australia and applied to the slurry conveying pipeline project in Papua New Guinea.

In accordance with the idea of??"borrowing a ship to the sea", Tianjin Pipe Group Corporation has built a seamless steel pipe oil casing processing base in the United States, which has demonstrated the "going out" of China's steel pipe. China's steel pipe enterprises are not only exporting steel pipes in foreign trade, but also exporting steel pipe equipment and technology. China's steel pipe exports are expected to reach 9.5 million tons in 2014, an increase of 5.5%. Among them, seamless steel pipe 5.2 million tons, welded pipe 4.3 million tons.

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