Chinese seamless pipe prices to keep edging up

Asian Metal: Good morning, Director Zhao, thanks a lot for accepting the interview. Please give a brief introduction of Ansteel Seamless Pipe Plant.

Zhao: It's my pleasure. Built in March 1950, Ansteel Seamless Pipe Plant officially launched production on December 26, 1953. It stayed among one of the well-known "Three Major Projects" of Ansteel. Chairman Mao and Premier Zhou sent congratulatory messages after it completed, and Premier Zhou Enlai wrote the name for the seamless pipe plant.

Known as the "Cradle of Seamless Pipe Industry of New China", Ansteel Seamless Pipe Plant made great contributions to the country's economic development and national defense construction. We upgraded the old unit to the 219mm line in 2004, and dismantled it in 2018 to response the national capacity reduction call. We have two seamless pipe production lines (159MPM, 177PQF) right now made by SMS-MEER of Germany.

Asian Metal: What kind of seamless pipe does Ansteel mainly produce? How about downstream industries?

Zhao: Ansteel produces nearly 300 seamless pipes with different specifications and grades, dividing into oil pipe, line pipe, alloy steel pipe and carbon steel pipe. Therein, oil pipe includes all the API and non-API anti-corrosion series. Alloy steel pipe includes wear-resistant pipe, geological pipe, grid pipe, cylinder pipe, boiler pipe, boom pipe, axle pipe, military pipe, etc. As a well-known brand, Ansteel seamless pipe are widely used in industries such as petroleum, chemical, machinery, geology, coal, military, transportation and so on.

Asian Metal: Where do you sell seamless pipe to?

Zhao: Located in the Circum-Bohai-Sea region, Ansteel formed a sales pattern based on the Northeast and North China and radiating to East and South China by relying on the strong maritime advantages. We supply most materials to end users directly and deliver few to distributors.

Asian Metal: The COVID-19 impacted China's economy and the entire steel industry seriously. How about the downstream demand for seamless pipe this year?

Zhao: The COVID-19 forced the world economy to halt for some time. Of course, the seamless pipe industry failed to leave alone. Both the epidemic and the plunge of crude oil prices oil discouraged the oil pipe industry. Dragged by the weak demand in the domestic market as well as the tough export situation, lots of oil pipe processing enterprises suspended production in H1 of 2020. Nevertheless, the demand recovered gradually in the H2, and the overall demand in 2020 might similar to that of 2019.

Asian Metal: Prices for seamless pipe kept changing narrowly since early this year, with the range of about 5%. They began to go up continuously from early June, and hit the level before the COVID-19 right now. How do you expect for the price in Q4?

Zhao: Personally, I believe prices for seamless pipe might continue the upward trend in September and October, and might fall back slightly from November with the arrival of the traditional low season.

Asian Metal: Nowadays, overcapacity and homogenization pile in the seamless pipe market. How can enterprises blaze a path of differentiated competition?

Zhao: In my opinion, modern enterprises should bear the environment production in the mind and produce intelligently. For us, adhering to the idea of "quality-prior and customer-centric", we need to stabilize product quality and occupy the special product market so as to avoid the fierce competition.

Asian Metal: What's your biggest challenge at present? What about your advantages?

Zhao: As a state-owned and large-sized enterprise, Ansteel ranked among Fortune 500 Largest Global Corporations, and seamless pipe occupies a small share of it. At present, the seamless pipe industry performs weaker than the overall steel industry, and how to ensure seamless pipe proportion becomes the largest challenge for us.

Relying on the complete steel production process and equipment from mining, ore dressing, sintering, ironmaking, steelmaking, rolling, coking and chemical, refractory, utility and transportation, we control the production cost efficiently and guarantee the delivery time. Based on the advanced equipment and strong technology research capabilities, we stride forward to the development and massive production of high value-added products. In addition, by selling materials as a whole, Ansteel marketing center ensures us to give full play to the advantages of our products. The last and the most important, the Ansteel brand acts as a golden sign and has a perfect market reputation.