China's seamless steel pipes have experienced decades of development and have now become the world's largest producer and consumer of seamless steel pipes. Among them, Shandong Province has become China's largest producer of seamless steel pipes. However, the concentration of China's seamless steel pipe industry is relatively low, with CR5 being only 22.1%. Therefore, in recent years, the state has actively promoted industry mergers and reorganizations, and it is expected that the industry concentration is expected to further increase in the future.
Regional competition in the industry: Shandong is the largest producer of seamless steel pipes in China
At present, China's seamless steel pipe production areas are mainly concentrated in Liaocheng, Shandong Province, Suzhou, Wuxi and Changzhou, Tianjin, Wenzhou, Zhejiang, etc.
Liaocheng City, Shandong Province is China's largest seamless steel pipe industry base. There are more than 1,000 seamless steel pipe manufacturers in Liaocheng, with products ranging from 4*1 capillary tubes to 760*40 thick-walled large-diameter seamless steel pipes. In addition, carbon steel and alloy steel seamless steel pipes are advantageous products in Liaocheng City, Shandong Province. Zhejiang Wenzhou area mainly produces stainless steel seamless steel pipes.
Although there are a large number of seamless steel pipe companies in China, they are generally small due to restrictions on capital, technology, human resources, and research and development capabilities. Tianjin Pipe is the company that produces the most seamless steel pipes in China, with a market share of about 8.1%. Other leading seamless steel pipe companies include Bao BTGT Steel Group Seamless Steel Tube Company, BGJT Steel Group, HL Seamless Steel Tube Technology Group and XY Sewing steel pipe company, etc.
The market share of the top five seamless steel pipe companies in China is about 22.1%, and the market concentration is low. The concentration of the foreign seamless steel pipe industry is much higher than that of my country. The output of the three major international seamless steel pipe companies (Vallourec, Tenaris and TMK) accounts for about 70% of the world's seamless steel pipe output (excluding China).
Low market concentration, the state encourages mergers and acquisitions
The low concentration of China's seamless steel pipe industry is one of the main reasons why Chinese seamless production companies do not have the right to speak in the market. There are problems such as mutual price reduction and malicious competition in exports. At the same time, the industry is also frequently subjected to "dual reverse investigations", such as Russia in 2014 Both Kazakhstan and Kazakhstan initiated anti-dumping investigations against Chinese seamless steel pipe companies, resulting in a sharp drop in the number of Chinese seamless steel pipe exports to these regions, by more than 40%, which affected the overall interests of the industry.
Therefore, in recent years, China has supported encouraging seamless steel pipe companies to conduct cross-regional, cross-industry, and cross-system mergers and reorganizations, so as to effectively increase the market concentration of the industry. In June 2016, BGJT Steel Group and WGJT Steel Group announced the launch of a strategic reorganization. China BWGT Steel Group was formally established, starting a new round of mergers and acquisitions in the seamless steel pipe industry. It is expected that industry mergers and reorganizations will intensify in the future, and industry concentration is expected to further increase.
Dedicated pipe production takes the highest proportion
In the product structure of seamless steel pipes, the ratio of output to demand for various special pipes accounts for about 40%. Special pipes include oil well pipes, boiler pipes, bearing pipes, automobile axle casings, etc.
China's oil well seamless steel pipe production capacity accounts for half of the world
Among special pipes, China's oil well pipe has the most competitive advantage. China's oil well pipe production has a history of more than 50 years. Since 2012, China's oil well pipe self-sufficiency rate has reached 99%, and its production capacity accounts for 59% of the world's total production capacity. It has become the world's major oil well pipe production base.
In addition, China has obtained 79 manufacturers of API 5CT seamless steel pipes, accounting for 41.6% of the number of manufacturers of API 5CT seamless steel pipes in the world.
The oil well pipe market is highly concentrated
On the other hand, China's oil well pipe market is highly concentrated, with CR5 of about 40%. Among them, Tianjin Pipe has the highest production capacity, accounting for 15% of production capacity, followed by BGJT Steel Group, BTGT Steel Group Seamless Steel Pipe Company and BJ Petroleum Steel Pipe Technology Group, all of which account for more than 5% of production capacity. CB Steel Pipe Technology Group, HL Seamless Steel Pipe Group and WXLM are also major players in the Chinese oil well pipe production market.
However, compared with the concentration of major foreign oil well pipe manufacturers, the concentration of China's oil well pipe market still needs to be improved. The three major foreign companies, Tenaris, TMK, and V&M, account for 71% of the global market (excluding China), while my country’s CR3 is only 29%.