Urbanization Pulls the Demand of Steel Pipe in China

This year, although global economy has not yet apparently recovered and domestic market demand is not expected to be optimistic, the urbanization construction and followed energy market, especially oil and gas market, still remains strong demand of steel tube.

 

Under the current situation of high-speed urbanization, accelerating the development of city gas pipeline network construction will be an important direction, thereby giving impetus to the demand of steel pipe. Relevant data show that new urban population will reach 400 million in the next decade, which may bring increased investment demand by 40 trillion Yuan. During the "Twelfth Five-Year" period, China will newly build 250,000 km gas pipeline, reaching the total length of 600,000 km. In accordance with the general trunk consumption of 500 tons/kilometer, steel pipe demand for 250,000 km gas line should be very considerable.

 

The acceleration of natural gas development will pull the pipe market demand. Coal accounts for 70% of China’s energy consumption and gas accounts for only 4%. In 2015, China will increase the proportion of natural gas consumption in the energy structure to 8% and will reach 10% in 2020. Gas resources exploration in upstream and utilization in downstream covers the development of coal bed methane, shale gas, coal gas etc.

 

During the "Twelfth Five-Year" period, China will also invest 81.1 billion Yuan to build 24 gas storages, pulling the demand of the steel pipe. Refer to the data of west-east second gas line, 8800 km lines (total 4.4 million tons steel pipe) owns a gas supply capacity of 30 billion cubic meters. Presumably, the construction of long-distance gas pipeline will need 13.86 million tons steel pipe.

 

In 2014, China's continues to speed up the oil & gas strategic channel construction. According to the Institute of CNPC Planning, the next five years, China's new national strategic oil reserve base will invest 80 billion Yuan and oil and gas pipeline construction also needs an investment of $350 billion. Therefore, demand of steel pipe continues to be very large. Chinese steel pipe market is still believed to hide huge potential within a long period.