Analysis of future global steel pipe demand and China's export situation
With the continuous growth of global resource demand, the prices of crude oil and natural gas have been rising in recent years. OPEC (OPEC) Secretary General said that by 2020, OPEC oil supply will increase by 9 million barrels per day, ensuring an adequate and stable supply of global petroleum products. The production of oil and natural gas requires a large amount of steel, of which the majority of pipes, including welded pipes and seamless pipes. The author believes that this round of international energy prices will rise sharply, and what impact will it have on China's steel pipe export market, which is worth studying.
First, the rise in crude oil prices stimulates crude oil mining
The new round of sustained economic growth is one of the main reasons for the growth in energy demand. At the end of June 2008, the price of crude oil broke through USD$140/barrel in one fell swoop. Compared with 1995, it increased by 7 times. Compared with the beginning of 2007, it increased by 170%; compared with the same period of 2007, it increased by nearly 100%.
The TOCOM (Tokyo Industrial Exchange) index also showed that the crude oil index increased by 80.2% and the natural gas index increased by 47.1% compared with the same period of last year (Figure 1). Excluding the price increase caused by inflation, the rise in crude oil prices is still very rapid. It is also easy to see from Figure 1. Since March 2008, oil prices have grown faster than natural gas. However, according to foreign experts, natural gas prices may rise by 50% in the second half of the year.
In order to ensure the long-term demand for global oil, OPEC increased oil production in Saudi Arabia, UAE, Alanya, Kuwait, Qatar, Libya and other regions from 2008 to 2010. By 2010, OPEC's daily production capacity reached 39.7 million barrels per day. Compared with 2007, the growth rate was 11.2%. The average annual supply in 2008-2010 increased by 3.5%.
2. It is estimated that global steel pipe demand will increase by 4 million tons per year in the next few years.
Rising prices will encourage energy producers to increase investment and expand production to meet new needs. Whether it is oil and gas exploration, transportation or processing, a large number of seamless pipe casings, welded pipe casings and line pipes are required.
OPEC member countries will increase the amount of energy extraction, and a new batch of petroleum engineering projects will be added, assuming an average oil density of 0.88, 1 ton of oil equals 7 barrels, and each well produces 20 tons/day, and each well requires one oil well pipe. 65Kg, the average depth of the oil well is between 700-1500 meters, the oil well pipe accounts for about 40% of the total steel, and the steel pipe accounts for 92% of the petroleum industry steel. If the annual average increase is 1 million barrels/day, then, 2008-2010 In the year of OPEC member countries, a total of 224.3-480.5 million tons of steel pipes were needed, and the average annual demand increased by 7.44.86 million tons. If the demand for steel for NGL and other liquefied products is added, the average annual demand for steel pipes can increase by nearly 1.3 to 2 million tons.
From the perspective of natural gas construction, the global natural gas pipeline construction (to 2012) requires more than 25 million tons of steel pipes. Among them, China's West-East Gas Pipeline Phase II and Central Asia pipeline projects require more than 10 million tons of pipelines, with an average annual demand of 3.5-400 million tons, accounting for about 50% of global pipeline pipe consumption; India, Malaysia The construction of natural gas pipelines in the Asia-Pacific region requires about 6 million tons of pipelines, accounting for 25% of global consumption. The average annual demand in the international market has increased by about 2 million tons.
According to the above analysis of the overseas construction of oil and natural gas, the annual average new demand for steel pipes in the international market is estimated to be about 4 million tons in the next few years. It can be said that the international market demand is relatively strong.
Third, tariff adjustment changes the structure of export products
In 2007, China's steel pipe enterprises exported a total of 9.36 million tons, accounting for 15% of the country's total exports. As can be seen from Figure 4, the tariff policy promulgated by the National Development and Reform Commission in June 2007 has a significant impact on the export volume of steel pipes. In August 2007, the export volume of steel pipes decreased by 25.3%. Among them, the export volume of welded pipes decreased by 35.1%. At the same time, the structure of steel pipe export products has also changed. The seamless pipe still enjoys the national export tax rebate. The export ratio has risen sharply, nearly 50%; the proportion of welded pipe exports has dropped from the previous 50% to about 20%.
In the long run, from the second half of 2007 to March 2008, the export volume of welded pipes continued to decline, compared with a 72% decrease, but the export volume has gradually picked up in recent months. The export price of welded pipe is supported by high cost and demand, and has been rising. The monthly average increase is 2%, which is 34% higher than the same period of last year. It is not difficult to see from Figure 4 that the required power of the welded pipe is stronger than that of the seamless pipe, and the export demand is rigid.
On the other hand, since the tax rate adjustment of the seamless pipe in June last year, the proportion of its export volume to the total export volume of steel pipes has been increasing, about 50%. In the second half of 2007, steel pipe enterprises increased the production and sales of seamless pipes, resulting in a slightly larger supply of the market than the market demand. However, due to the rising prices of raw materials, the market prices were slowed up and fluctuated.
Fourth, China's steel pipe anti-dumping cases increased, the export market is facing challenges
In recent years, a large number of Chinese steel products have been exported. Anti-dumping and countervailing cases have occurred frequently. To this end, the National Development and Reform Commission has cancelled the export tax rebate for most steel products. After adjusting tariffs in June 2007, the number of steel pipe exports has decreased significantly, and the structure of export areas has also shown new features.
Among the major export areas of seamless pipes in China, North America has the largest proportion, accounting for about 1/4 of the country's total exports. Up to now, only the seamless pipe exports to the United States accounted for 26% of the country's exports, and the growth rate is very fast, accounting for 14% in Europe. The European Commission received an EU industry application on June 26 and will conduct an anti-dumping investigation on the production of seamless pipes in China. If the final ruling imposes anti-dumping duties and countervailing duties on Chinese seamless pipes, China will reduce its export volume by 300,000-400,000 tons per year. Moreover, the increasing number of exports to the US market is worthy of the attention of domestic seamless management companies. The Chinese government is also very likely to introduce policies to reduce or cancel export tax rebates to reduce the growing friction between China and the United States.
In the first five months of this year, the country produced a total of 747,900 tons of seamless steel pipes, of which 1,194,200 tons were exported, accounting for 26.1% of the total production. Under such high foreign trade dependence, if the export tax rebate rate is reduced or canceled to the domestic market The impact will be enormous.
Among the major export areas of welded pipes, North America accounted for 34%, followed by Asia Pacific with 17%. Due to the rapid growth of demand in the steel market in the United States, the number of exports to the United States has not decreased significantly since the tariffs were imposed.
On June 20th, the US ITC ruled that China's export of ring-shaped welded carbon steel pipes to the United States caused damage to related industries in the United States. This move is a heavy punch for Chinese steel pipe companies. The United States will impose high tariffs on Chinese products exported to the United States in the next five years. The countervailing duty rate will be 30%-616%, an average of 37.2%, anti-dumping. The tax rate is 69%-86%. Canadian companies to the Canadian Border Services Agency (CBSA) are also conducting anti-dumping and anti-subsidy investigations on welded pipes from China.
Once the North American market is lost, China's welded pipe exports will be reduced by 1.5-2 million tons/year. The reduction in exports will definitely put pressure on the domestic market. But will it have a huge impact on the domestic market? In the first five months of 2008, the domestic cumulative production of welded pipes was 9.17 million tons, of which 1.273 million tons were exported, accounting for 14% of the total production, while the North American market accounted for only 3.1% of the national production. . The data shows that the dependence of welded pipes on exports is significantly less than that of seamless pipes, which means that the impact of changes in export markets on the domestic market is small.
Welded steel pipes are mainly made by electric welding, and the electric energy consumption is large. In June, the domestic electricity price was increased by 1.7 points/kWh. The impact on the welded pipe production enterprises is self-evident, and there are fewer domestic welded pipe new projects. The arrival of high temperature in summer will inevitably lead to a decline in welded pipe production.
In summary, the author believes that the welded pipe exports will not be significantly reduced, the domestic market supply may be tight, the price will still be at a high level.
The high dependence on foreign trade makes the seamless pipe market more subject to the attitude of the country to see the changes in the export market and what policy measures to adopt.
The steel pipe industry ushered in the "big test"