Black series (a part of bulk stock, including oil, coal, steel, etc) had an extraordinary year in 2016. Look ahead to 2017, a number of people predict that there is no big rise for stainless steel market condition like 2016 but is definitely better than 2015.
Look back to 2015, the market was in the doldrums due to the continuous fall of stainless steel pipe price. But things will develop in the opposite direction when they become extreme. A lot of steel factories enormously reduce their production because of the loss, which lead to an reversal for stainless steel pipe market in the beginning of 2016. The raising of Chinese stainless steel pipes made iron ore price go up.
Our government has passed a new legislation about stainless steel pipe industry. These three policies are related to the raising and falling of the market.
NO.1 From January 1st, 2017, differential electricity price and step tariff of process energy consumption policies are implemented strictly in stainless steel industry.
NO.2 Our government' investment to infrastructure construction stimulates the needs for domestic industrial metals. At present, we strive to develop infrastructure construction. With the development of Public-Private Partnership Project--airport, water, railway, energy field, the needs of stainless steel won't cut down. The investment of infrastructure construction is expecting to grow rapidly, which is the mainstay for increasing demands for stainless steel pipes
NO.3 From July of 2017, steel factories in Beijing, Tian Jin, He Bei and cement industry need certificates to deal with the sewage. Before June 30, 2017, thermal power and papermaking enterprises should apply for the certificate, and get the certificate. The pilot project are trying it out in Beijing City, Bao Ding City, steel in Lang Fang City and cement elevated source.
From July 1st, 2017, the enterprises that we mentioned should have certificates for dealing with the sewage, and set up self monitoring, information publication, ledger records and period report systems. With the management of national pollution control, some small scale stainless steel factories which cause serious pollution are going to be bankrupted. Normalizing stainless steel pipe manufacturers will be a mainstream. The price of stainless steel pipe is back on track gradually with a reasonable price range.