Examining China’s Steel Pipe Industry Export Trends in H1 2023

In the first half of 2023, the Chinese steel pipe industry has displayed remarkable growth in both production and export, defying some challenges in the global steel market. This report provides an analysis of the steel pipe production, exports, and the factors influencing this industry’s performance.

Steel Pipe Production in the First Half of 2023

According to data released by the National Bureau of Statistics, China’s crude steel production in the first half of 2023 reached an impressive 536 million tons, marking a year-on-year growth of 1.3%. In contrast, the apparent consumption of crude steel during the same period decreased by 1.9%. However, steel pipe production and consumption exhibited a counter-trend surge, following a “double growth” trend since 2022. During the first half of this year, China produced 48.67 million tons of steel pipes, marking a substantial 12.2% year-on-year increase. Apparent consumption reached 43.6747 million tons, demonstrating a significant 9.76% surge and being the highest among the 21 major steel product categories.

Specifically, the production of seamless steel pipes reached 17.35 million tons, showing a remarkable 13.77% year-on-year increase, with an apparent consumption of 14.4176 million tons, marking an 8.1% increase. Welded steel pipe production stood at 31.32 million tons, indicating an 11.4% year-on-year growth, with an apparent consumption of 29.257 million tons, which rose by 10.7%.

Steel Pipe Imports and Exports in the First Half of 2023

Customs data reveals a robust performance in China’s steel exports for the first half of 2023. The country exported a total of 435.8 million tons of steel products, reflecting an impressive year-on-year increase of 31.3%. Steel pipe exports played a significant role, with China exporting a total of 5.0921 million tons of steel pipes during the same period, marking a substantial 37.07% increase, maintaining the strong growth momentum from the previous year.

Seamless Steel Pipe Imports and Exports

In the first half of 2023, China’s exports of seamless steel pipes reached 2.9851 million tons, displaying a remarkable 50.64% increase. Although exports for March, April, and May remained high, June saw a decline of 10.26%, with a month-on-month drop of 18.26%, ending a five-month consecutive growth streak. Conversely, the first six months of 2023 witnessed a significant decline in imports of seamless steel pipes, amounting to 52,600 tons, a decrease of 22.99%.

Exports of major seamless steel pipe varieties all showed double-digit growth, with exports of oil well pipes surging by 65.7%, pipeline pipes increasing by 45.56%, boiler pipes by 46.8%, and other seamless steel pipes by 40.14%. This indicates a sustained demand for seamless pipes in the international market.

The average price for seamless steel pipe imports and exports displayed a “one increase, one decrease” pattern, standing at $9,183 per ton for exports (a 58.25% year-on-year increase) and $1,508 per ton for imports (a 10.77% decrease). This further widened the price gap between China’s exports and imports of seamless steel pipes.

The growing price differential between China’s seamless steel pipe exports and imports can be attributed to several factors. First, certain high-end imported pipe varieties remain irreplaceable by domestic production, even though their quantity has been decreasing. These imported pipes command prices significantly higher than the domestic average. Second, China’s competitive advantage in pricing for seamless steel pipe products in the international market, combined with prices below those of the destination markets, has been a major driver of the substantial increase in steel exports in 2023.

Top Export Destinations and Importing Countries

In the first half of the year, Kuwait and Thailand remained the top two destinations for China’s seamless steel pipe exports, with respective exports of 267,900 tons and 191,100 tons, marking year-on-year increases of 198.6% and 52.3%. They continue to demonstrate strong growth. Among the top 10 export destinations, Egypt, with a significant increase in exports of 250%, jumped from 14th place last year to 10th place, replacing Canada in the top 10.

The primary regions for China’s seamless pipe exports, in descending order, were Kuwait, Thailand, Turkey, the UAE, India, Iraq, Indonesia, South Korea, Oman, and Egypt. These ten countries accounted for a combined export volume of 1.662 million tons, representing 55.68% of total seamless steel pipe exports in the first half of 2023.

Countries importing more than 2,000 tons of seamless steel pipes in the first half of the year included Japan, Romania, Germany, Italy, Argentina, South Korea, and Austria. They imported 25,100 tons, 4,834 tons, 3,884 tons, 3,012 tons, 2,150 tons, 2,109 tons, and 2,078 tons, respectively, with year-on-year changes of -12.82%, 20.71%, -23.62%, -50.87%, 257.51%, 9.84%, and 1,785%.

Welded Steel Pipe Imports and Exports

In the first half of 2023, the import and export dynamics of welded steel pipes displayed a mixed trend. Exports of welded steel pipes reached 2.107 million tons, reflecting a notable year-on-year growth of 21.56%. Monthly exports in April hit the highest level for the first half of the year at 432,500 tons. However, exports for May and June gradually tapered off. In contrast, imports of welded steel pipes during the first half of the year amounted to 44,000 tons, marking a significant decline of 39.32%.

Several factors have contributed to the substantial increase in China’s welded steel pipe exports in 2023. The domestic steel market faced supply-demand imbalances due to a slowdown in real estate investments, coupled with the impact of the depreciation of the Chinese yuan against the US dollar, motivating welded steel pipe companies to increase their export efforts. Additionally, China discontinued its steel export tax rebate policy in May and August 2021. With existing contracts mostly fulfilled and China’s competitive pricing in the international market, these factors have led to the substantial growth in welded steel pipe exports in 2023.

China’s exports of welded steel pipes reached their peak at 4.722 million tons in 2015, after which they gradually decreased year by year. In 2020, global steel exports were impacted by the COVID-19 pandemic, resulting in an 8.77% decline to 3.6107 million tons. In 2021 and 2022, exports of welded steel pipes reached 3.7748 million tons and 3.7999 million tons, respectively. It is expected that the growth rate for welded steel pipe exports in 2023 will be lower than the 21.56% observed in the first half of the year but will still be higher than in recent years.

In the first half of the year, China’s main exported welded steel pipe categories mostly experienced growth, except for welded oil well pipes, which saw a decrease in export volume. Export figures for welded pipeline pipes increased by 26.36%, square and rectangular pipes by 20.04%, other welded steel pipes by 21.33%, while welded oil well pipes decreased by 6.11%.

The average price for welded steel pipe imports and exports followed a pattern of “one increase, one decrease.” Export prices averaged $3,500 per ton (an 8.78% year-on-year increase), while import prices averaged $1,467 per ton (a 26.87% decrease). Import prices were 2.39 times higher than export prices.

Top Export Destinations and Importing Countries

In the first half of the year, the major destinations for China’s welded steel pipe exports remained Southeast Asian countries such as the Philippines, Myanmar, Indonesia, and Thailand. South America has also become a significant region for China’s welded steel pipe exports in recent years, with notable increases in exports to Peru and Chile. Among the top 10 export destinations, Thailand and the UAE recorded substantial growth in imports from China, increasing by 145.7% and 126.1%, respectively, replacing Singapore and Nigeria in the top 10.

The top ten export destinations for welded steel pipes were the Philippines, Myanmar, Indonesia, Thailand, Hong Kong (China), Saudi Arabia, South Korea, Peru, the UAE, and Australia. These countries imported a combined total of 891,000 tons of welded steel pipes from China, accounting for 42.3% of China’s welded steel pipe exports. The top 20 countries collectively imported 2.107 million tons, representing 63.9% of total exports. In 2022, the top 10 and top 20 accounted for 44.3% and 66.1%, respectively, indicating a slight decrease in export concentration in the first half of 2023.

In the first half of the year, major importers of welded steel pipes to China included Japan, South Korea, Germany, Switzerland, Vietnam, and Taiwan (China), importing 15,800 tons, 6,665 tons, 4,022 tons, 2,899 tons, 2,172 tons, and 2,056 tons, respectively. Steel pipes, seamless steel pipes, and welded steel pipes accounted for 11.69%, 6.85%, and 4.84% of total steel product exports, respectively.

Outlook and Conclusion

Reflecting on the first half of 2023, the global economy has faced increasing uncertainty, geopolitical conflicts, rising commodity prices, high inflation rates, and ongoing adjustments and restructuring in supply chains. Global trade continues to be under pressure. However, against the backdrop of contracting global demand, China’s steel pipe exports have continued to grow unexpectedly since 2022.

Several factors have contributed to this growth. First, high international crude oil prices have stimulated investment in oil exploration, leading to increased demand for oil well pipes and pipeline pipes. Second, inflation in developed countries in the Americas and Europe, coupled with continued US dollar rate hikes, has led to the depreciation of the Chinese yuan, motivating Chinese companies to export actively. Third, due to the lower export base in the first half of last year, and the continuation of some contracts into this year, the growth in steel pipe exports remains strong. Finally, China’s competitive pricing has enabled it to maintain a foothold in the international market. It is expected that the growth rate of steel pipe exports in the second half of the year will decrease but still maintain an upward trajectory.

China’s steel pipe companies must remain vigilant, as their export prices are lower than those of the international market and the global industry. This situation not only risks trade disputes but also places a greater responsibility on Chinese steel companies to reduce carbon emissions and achieve the “dual carbon goals,” requiring increased investment to meet these objectives.