This year, the effectiveness of China's steel industry achieved a comprehensive upgrade, what is the main reason? Prime Steel Pipe as the leading manufacturer and exporter of carbon steel pipe, including ERW steel pipe, LSAW steel pipe, SSAW steel pipe, seamless steel pipe, etc., we think the main reason are:
1. Domestic economy remain stable
First of all, the national economy remain stable, real estate, infrastructure, automotive and other related industries demand, become the biggest driving force of the steel industry. GDP growth 6.9% in the first half of 2017, for eight consecutive quarters to maintain the range of 6.7% -6.9%, of which real estate and infrastructure investment growth has rebounded.
2. Effective supply structural reform
Second, the supply structural reform and DE-capacity promotion effective changed the phenomenon of excess capacity. According to the data report, five years target of excess capacity of China's iron and steel industry is 100 million -1.5 million tons.
3. Steel enterprises cost reduction efficiency
In the first half of 2017, the country doing special rectification on the "ground of steel", banned, shut down more than 600 illegal production enterprises, involving about 120 million tons steel, it is good for develop steel industry. In the past, "ground steel" is made of scrap steel, after banned 'ground of steel', the price of scrap declined, it is helpful for fix the shortage of hot metal business; while scrap energy consumption is low, can help companies save a lot of cost.