Since the beginning of 2018, the world economy has recovered slowly and domestic economic development continues to bear downward pressure. Affected by the decline in demand, the contradiction between supply and demand in the domestic stainless steel pipe market has become prominent, and price competition has become increasingly fierce; the monopoly of imported iron ore prices has further increased, and environmental protection pressure has also increased. Judging from the current industry development, the situation facing the stainless steel pipe industry in 2018 is still grim.

The growth rate of the downstream steel industry declined, and steel demand declined. In the main steel industry, the growth rate of automobile manufacturing, electrical machinery and equipment manufacturing, railway and aerospace and other transportation equipment manufacturing industries has declined from last month, and domestic 304 stainless steel pipe consumption has also declined. From the overall situation, the downward pressure on the macro economy is still relatively large. Although the steel industry has maintained growth, the growth rate has declined from the same period of the previous year, which is the main reason for the decline in steel demand.

The homogenization competition is becoming increasingly fierce and gradually spread to high-end products. Affected by the slowdown in demand growth, the competition in the 304 stainless steel pipe steel market has become more and more fierce. In order to ensure the connection between production and sales, various steel mills have launched fierce price competition and gradually spread from the seamless pipe field to the strip and strip welded pipe series.

Stainless steel pipe manufacturers are difficult to raise financing, and the problem of financing is still outstanding. In recent years, affected by the bank's strict control of the scale of steel companies' loans, many steel mills are faced with problems such as no increase, difficulty in renewing loans, interest rate hikes and loan lending. Since November 2014, the central bank cut interest rates twice, which is conducive to alleviating the difficulties in financing the steel industry. However, the effect of the current corporate response has not yet been reflected. Due to the tight capital chain, a small number of manufacturers have stopped production and reduced production, and they are caught in a business dilemma. In order to prevent the risk of chain scission, stainless steel pipe factories have to adopt various channels to raise funds, which further increases the financial burden.

Environmental constraints have become more stringent, and the pressure on production and operation of stainless steel pipe manufacturers has increased. The new environmental protection law and the new series of steel industry standards have been fully implemented since January 1, 2015, which not only increased the assessment indicators, but also significantly tightened the emissions. To this end, on the one hand, steel companies will substantially increase environmental protection investment and carry out a new round of environmental protection projects; on the other hand, the operating costs will be greatly increased. The new emission standards strictly control the total discharge of pollutants for new projects. The Beijing-Tianjin-Hebei, Yangtze River Delta and Pearl River Delta regions are the regions with special emission restrictions for the “Twelfth Five-Year Plan”, and the implementation standards are more stringent. Faced with severe environmental protection requirements, the pressure on production and operation of enterprises has further increased.

The stainless steel pipe industry is a tough industry in the national economy. It is a technology, capital, resource, energy, and labor-intensive industry, but it is also one of the industries with the most serious overcapacity and the greatest impact. In 2014, the steel industry solved the overcapacity and achieved initial results. The company's efficiency has improved, and energy conservation and emission reduction have made new progress. However, due to the weakening of downstream demand, the price of 304 stainless steel pipe fell sharply, corporate funds were tight, and the whole industry was still in the “painful period” of transformation and upgrading. The production and operation situation faced by stainless steel pipe manufacturers is still grim.