Reporters on the steel issue in research, industry associations, domestic steel companies more consistent view is that the rapid expansion in recent years, China's steel production, the emergence of serious overcapacity and overall structural surplus, have crowded the import and export market, which is China steel was the main reason for the frequent "double reverse" investigation. Some companies call for production of steel pipes must be able to limit as soon as possible, according to the current situation continues, China's steel industry is likely to fall into a more difficult situation in the future.

Our steel industry is divided into two major categories of seamless steel pipe and welded steel pipe. In recent years, rapid development of the steel industry on the one hand makes the domestic steel companies in the technology, quality, production has improved significantly, but also makes new investments into the continued, rapid expansion of all real estate, resulting in the current total amount of steel overproduction.

Reporters learned that, due to the hot market a few years ago, around the seamless steel enterprises have invested to expand production capacity, although a substantial decline in the financial crisis, the impact of international and domestic market demand, but in the construction or completion of a new production line has been unable to dismount, China's seamless steel production capacity still further expansion.

Minister of the Department of Market Management Pangang Group Chengdu Iron & Steel Co., Ltd. Zhong language told reporters the company in 2008 was the relocation of transformation, a transformation of the investment unit of seamless steel pipe rolling into production this year, production capacity of 200,000 tons. Hunan Valin Hengyang Steel Tube Group Marketing Director Wu Guojun said that in 2008 investment in building power plants with 720 large diameter thick wall pipe production line, in July 2009 formally put into production, design capacity of 150,000 tons.

China Steel Pipe Association Branch anonymity of the person in charge, since a few years ago seamless steel high overall level of profitability, stimulated some local and some enterprises have launched new projects, leading to overcapacity, oversupply. Press this trend continues, by 2010, China's steel industry's total production capacity will exceed 60 million tons, exceeding 15 million tons more than the actual demand.

Reporters research found that, in recent years around the steel production capacity not only surrounded by flowering, rapid expansion, and the tendency of the homogenization prominent, very serious structural surplus.

China Steel Pipe Association branch official said, with seamless steel pipe products OCTG as an example, China's OCTG production capacity has reached 8.5 million tons, accounting for about 2/3 of the world, the actual output of 6.67 million tons in 2008, wherein the domestic CNPC, Sinopec, CNOOC and extend the four major oil consuming a total of 2.78 million tons domestic oil pipes, as well as dependence on exports of up to 3.99 million tons, oil country tubular overall excess capacity of nearly 200 million tons. By the financial crisis, the international oil prices fell sharply in 2009, China's OCTG exports are expected to decline to 200 million tons, the domestic market consumption fell to 2.5 million tons, the amount of excess production capacity will reach 400 million tons, accounting for about half of the total capacity.

Person, who declined to be named, said of seamless and welded pipe market capacity is not big, too fast export growth, especially in the backward production capacity also compete herd export resources, is bound to have problems. The United States on Chinese seamless steel pipes "dual" but also because of imports from China too, under normal circumstances, stocks should be 5-6 months, and the current US inventory of OCTG and 300 million tons, need 6 months to digest to normal levels, which is why this year, the US international Trade Commission when Chinese OCTG threat of injury to a vote, there have been six members unanimously voted in favor of rare cases.

Herd excess capacity, by the loss of the surface is their own, and ultimately by the loss of the entire industry. Like seamless steel pipe in the drill pipe, the original market demand is not large, only a few companies worldwide production. In 2006 a company to invest in Jiangyin plant, as oil prices climbing higher and higher, efficiency is good, the results of this county there are four private enterprise project launched drill pipe, producing a county can be close to the original world production, and now these new private enterprises have been discontinued on.

Valin Hengyang Steel Tube Company Wu Guojun told reporters that the seamless pipe market, domestic enterprises to bargain with each other phenomenon is very serious, many foreign customers took the other domestic manufacturers directly to the company bargain prices, companies only reluctantly give up these customers.

Angang Steel Company Limited director Wang Feng said, the design capacity of Angang four production lines capable of 750,000 tons this year 1--10 surveyed month production capacity of less than 33 million tons, the year is expected to cut by 50%. "The more production, the production cost is higher; the higher the cost, the more cuts, companies caught in a vicious cycle, this year has lost more than 300 million yuan now OCTG prices have been flat or even lower than ordinary seamless steel pipe prices. such mutual bargain situation continues, the whole seamless steel pipe industry will face difficulties. "