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The Status of Development of Welded Pipes in China

Posted: 08/12/2022 15:40:08 Hits: 29

Large scale and specialization
Since the reform and opening up, especially in the past ten years, the production scale of welded pipes in China has continued to increase, and the production capacity has far met the quantitative needs of domestic economic growth. After the adjustment in 2018, the output of welded pipes showed a steady growth trend again; the proportion of the total steel pipes has also continued to increase. China's welded pipe production capacity continues to grow, specifications and varieties continue to expand, manufacturing and technical levels are gradually improved, and a large-scale and specialized market is gradually formed. From 2010 to 2020, the output and growth rate and the proportion of welded pipes in the total steel pipes in China are shown in Figures 1 and 2.

Figure 1 Production and growth rates of welded pipes in China from 2010 to 2020

Figure 2 The proportion of welded pipes in the total steel pipes in China from 2010 to 2020

In 2020, the output of welded pipes in China will reach 61.6659 million tons, and the apparent consumption will reach 58.281 million tons. The ratio of domestic apparent consumption to welded pipe production will reach 94.5%, and the proportion has remained above 92% since 2013. It can be seen that China's welded pipe production capacity can meet the domestic market demand, and there is still some export.

The varieties, specifications and manufacturing technology of welded pipes have developed rapidly. At present, China has been able to manufacture HFW welded pipes with a maximum outer diameter of 630mm and a steel grade of X80, as well as SSAW pipes (water delivery and structural pipes) with a maximum outer diameter of 4500mm. China has built a number of spiral seam submerged arc welded pipe units with pre-finished welding, which can produce high-quality oil and gas transmission steel pipes with a maximum outer diameter of 1422mm; in the production of straight seam submerged arc welded pipes, there is a UOE unit with pressure up to 70000MPa). The maximum outer diameter of the product reaches 1422mm, the maximum wall thickness 38.5 mm, and the steel grade X80M. China's welded pipes have been widely used in engineering structure, machining, oil and gas development and transportation and other fields. In addition, in the manufacture of welded pipe equipment, China has been able to process and manufacture small-diameter thick-walled welded pipe units with an outer diameter of 19.0 to 42.7 mm and a maximum wall thickness of 11mm, as well as various large and medium-diameter submerged arc welded pipe units.

The increase in the production capacity of welded pipes has led to the formation of a large-scale and specialized welded pipe market. For example, a steel pipe company in Tianjin has manufactured a thousand tons of welded pipes in water supply and drainage, construction, engineering structure and other fields, focusing on serving the national energy strategy. A complete management system for technology research and development and product manufacturing has been formed in the fields of high-end products such as marine pipes, large-diameter thick-walled and high-grade steel-grade line pipes, anti-corrosion pipes and anti-strain pipes.

Unbalanced market development
For a long time, there has been continuous and repetitive construction and production in China's welded pipe industry, resulting in excess capacity, intensified market price competition, low-capacity utilization, and limited profitability. According to the incomplete statistics of the Steel Tube Branch of the China Steel Structure Association, the capacity utilization rate of welded pipes in China in 2020 is 81.14%, which is more than 3 percentage points higher than the utilization rate of 78% for welded pipes at the end of the "Twelfth Five-Year Plan" period. There are still many welded pipe production lines, which are mainly concentrated in North China.

Welded pipes are made of steel sheets, which have a dual impact on the market's response. When the price of raw materials rises, it is difficult for the competitive pressure to be put to the user end in time, especially in the recent period. The price of hot-rolled steel sheets has been adjusted substantially continuously, which brings greater challenges to welded pipe enterprises in terms of prices and delivery. When the price of raw materials drops, the user terminal will quickly feedback information on the sales of welded pipes, which will bring conductive pressure to the profitability of welded pipe enterprises. For example, the gross profit margin of a company in 2020 was only 4.78%. In recent years, some welded pipe production lines have been transformed, upgraded or shut down.

There is a big difference between the import price and export price of welded pipes in China, which reflects that the product structure of welded pipes in China needs to be improved and the international competitiveness is insufficient. Since 2015, the export volume of welded pipes in China has remained above 3.6 million tons per year. The import volume has been above 180,000 tons per year, and the average price difference between import and export is more than 1200US dollars per ton. The average price difference between imports and exports in 2020 drops by 22% compared with 2019, and the narrowing of the price difference is mainly due to the decline in import prices. Figure 3 shows the import and export volume and the average price of welded pipes in China from 2015 to 2020. China's welded pipes are mainly exported to developing countries and regions and mainly are products with low prices, large volumes and low additional values. China imports welded steel pipes from developed countries and region, and they are pipes with high prices, small quantities and high added values.

This shows that China's welded pipe industry has a gap compared with developed countries in terms of high value-added varieties and structures. Domestic homogenization competition and foreign high-value-added import will be the reality that China's welded pipe industry must face.

Figure 3 Quantity and average prices of import and export of welded pipes in China from 2015 to 2020

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