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    Effects On Pipeline Supply: Oil Price Falling and Gloom for Hebei Steel Industry

    The oil prices keep falling

    The oil prices plummeted to USD49.00 per barrel in January 2015 from around USD115.00 per barrel back in June, 2014. The dramatic falling throw world economy into unexpected turmoil. And there is no sign shows that the oil prices may bounce back again in a short period. As prices slid, the market waited to see whether OPEC(especially Saudi Arabia), the largest oil cartel, would cut back on production to push the prices back up. To everyone's surprise, Saudi Arabia has no willing to cut the production. In order to throttle the US shale companies who extract oil from shale formations in North Dakota and Texas, Saudi Arabia doesn't take any action but let the oil price go into free-fall. In spite of the civil war of Syria, Sanctions on Iran, ISIS threats to Iraq, the world's output of crude oil keeps growing in the past 3 seasons. Meanwhile, in the world's two significant oil consumption countries - China and Germany, their oil demand suddenly dropped down. In US, cars become more and more fuel-efficient which led to less oil consumption. The combination of all factors led to free-falling oil prices.

    Gloom for Hebei steel industry in China

    Entering Chinese sheep year 2015, many steelmakers in Hebei province struggle to survive through the harsh winter of industrial reforms guided by authority. It is reported that there was a 0.6%-drop in crude steel output in 2014. This is an extraordinarily depressed sign since this figure has been increasing since 2000. There are two reasons to explain the gloom: sever overcapacity and air pollution & environment protection concerns.

    Effects on piping components supply industry

    Although the low oil price is a good news to consumers, it is not such a blessing for constructing the pipeline to transport oil or petrochemical products. Many oil companies may hold or postpone the construction of new projects which eventually leads to demand reduction on the piping components. The recession of steel industry in China also lows down profit expectation causing rat-race competition. Manufacturers has to work harder to balance the cost which is arising all these years.

    How to make breakthrough

    Fortunately, realizing the global steel business trends, Hebei Metals Industrial Limited has been transferring its business to high-tech / high value-added industrial fields such as the manufacture and supply of aluminium bronze butterfly valvessuper duplex stainless steel pipes, special alloy steel or alloy flanges & fittings(chromium-molybdenum ASTM A182 F5/F11/F22/F9, ASTM A234 WP5 / WP11 /WP12/WP22/WP9/WP91; nicke alloys such as inconel/monel/hastelloy, titanium), etc. We will not only pay attention to the competitiveness but also make sure the high quality.

    Views: 8184  Author:METALS INDUSTRIAL  Date:2015/03/02