In 2024, China's steel industry continues to grapple with significant challenges both domestically and internationally. Geopolitical conflicts have intensified, and the Federal Reserve's repeated delays in interest rate cuts have compounded these issues. Domestically, the shrinking real estate sector and the pronounced supply-demand imbalance in the steel industry have hit welded steel pipe products hard. As a crucial component of construction steel, the demand for welded steel pipes has significantly dropped due to the downturn in the real estate market. Additionally, the industry's poor performance, manufacturers' strategy adjustments, and structural changes in downstream steel usage have led to a year-on-year decline in welded steel pipe production in the first half of 2024.

Inventory levels at 29 major pipe factories in China have been about 15% lower than the same period last year, yet still pose pressure on manufacturers. Many factories are tightly controlling inventory levels to maintain a balance of production, sales, and inventory. The overall demand for welded pipes has weakened significantly, with transaction volumes down by 26.91% year-on-year as of July 10.

Looking ahead, the steel pipe industry faces intense competition and oversupply issues. Small-scale pipe factories continue to struggle, and leading factories are unlikely to see high capacity utilization rates in the short term.

However, China's proactive fiscal policies and loose monetary policies, along with the accelerated issuance of local and special bonds, are expected to boost demand for steel pipes in the second half of 2024. This demand will likely come from infrastructure projects. The total welded pipe production for the year is estimated to be around 60 million tons, a 2.77% year-on-year decrease, with an average capacity utilization rate of approximately 50.54%.