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Excess Capacity And Trade Friction Caused By The Damage To The Pipe Fittings

Jun 13, 2017

Excess capacity and trade friction caused by the damage to the Pipe Fittings
The excess Pipe Fittings capacity and trade frictions reported that excess Pipe Fittings capacity is damaging the global Pipe Fittings industry, and the industry's financial indicators may be worse than the global steel crisis in the late 1990s.

From the domestic market demand growth of the variety structure, the first half of the apparent consumption of long products increased by 18.19%, Pipe Fittings only increased by 4.57%, a difference of 13.62 percentage points; driven by demand, the first half of Pipe Fittings production increased by 12.39% While Pipe Fittings production decreased by 2.66% (excluding hot-rolled narrow strip for the reduction of 5.5744 million tons, down 4.75%). This situation shows that the current substantial growth in fixed asset investment, the demand for Pipe Fittings fittings is mainly driven by the main Pipe Fittings-based construction materials.

Global Pipe Fittings fittings consumption of 1.648 billion tons, less than the nominal capacity of about 516 million tons, the difference for the global Pipe Fittings industry in the history of the highest, and the next few years the excess capacity will be more severe. 2013 - 2017, the global Pipe Fittings production capacity may increase by 197 million tons, or 9.1% growth, while the tube consumption is only moderate growth.

In the first half of the net imports of crude steel products 134,900 tons, the same period last year net export Pipe Fittings 879,300 tons, the change in the domestic market, the apparent consumption of Pipe Fittings fittings increased by 21.2292 million tons over the same period last year, accounting for the first half of the apparent consumption increase 24.47 million tons of 86.75%, imports of products dominated the domestic market, the domestic supply and demand balance to bring adverse impact and impact.

An excess capacity in a region of the world may have to replace the capacity of another region, which is bound to cause damage to the parts of the market that are being replaced by the market, triggering trade frictions and government involvement in the protection of domestic industry. Today's trade frictions continue to heat up, and the trend is exacerbated, government subsidies to boost the equipment investment, or should be closed to maintain the production of enterprises, is the main cause of trade friction.

In the first half of this year, China's average export FOB FOB price of 1090.46 US dollars / ton, while the average imports of CIF 1138.65 US dollars / ton, the price difference of only 48.19 US dollars / ton, considering the FOB and CIF between the transport costs Gap, China's export price advantage has been lost, exports to China is very unfavorable, short-term export recovery will be more difficult.

In the first half of the year, the net imports of imports amounted to 1,349,900 tons, compared with a net export Pipe Fittings of 19879.33 million tons in the same period of last year.
Said that for the government, the elimination of market distortions such as subsidies and other essential, the only way to inhibit the emergence of new capacity or speed up the loss of Pipe Fittings closure. Aims to establish a common view, to avoid trade and competition distortions, to produce long-term sustainable positive impact on the global Pipe Fittings market