Chinese HR strip prices to remain high in Q2

Asian Metal: Thanks for taking our interview. Please introduce your company briefly.

Mr. Chen: Tianjin Zhaobo Industrial Co., Ltd. was established in 2001 with more than 500 employees. After more than 20 years of development, it has developed into a large group of private enterprise integrating production, operation and service, including HR strip, angle steel, pipe, transportation, etc. The annual production capacity of HR strip is 800,000t, and the main specifications are 1.0-7.0mm*156-413mm. Our HR strips are ideal raw materials for pipe making, cold rolling and other industries. The annual output of hot rolled equilateral angle steel is 500,000t, including about 20 specifications of 4#-16#.

Asian Metal: Which industries is your HR strip mainly used in? Where do you mainly sell your HR strip?

Mr. Chen: At present, our products are mainly used as raw materials for cold rolled strip, welded pipe, cold bending and welding section steel, and for photovoltaic support, greenhouse support and C-steel structure. Our HR strip is mainly sold to welded pipe plants in Tianjin, and we also supply materials to other regions such as Shandong and Hebei.

Asian Metal: How is the demand for HR strip from downstream industries?

Mr. Chen: At present, the demand from downstream customers is satisfactory on the whole. On the one hand, welded pipe prices in Tianjin have increased by about RMB2,000/t (USD310/t) after the Spring Festival holiday. Due to the high price level, welded pipe plants have considerable profits and high production enthusiasm. In addition, our products are easy to use in downstream pipe plants, and need not to be cut. The demand is relatively stable and our monthly output remains at about 60,000t.

Asian Metal: HR strip prices in North China fluctuated greatly due to the price change of steel billet since February. How about the current market price in Tianjin?

Mr. Chen: HR strip market in Tianjin is greatly affected by the prices of steel billet and HR strip in Tangshan. After the Spring Festival, steel billet prices in Tangshan increased by RMB230/t (USD36/t) at first, then reached RMB4,410/t (USD684/t) in early March, and finally slowly dropped to RMB4,290/t (USD665/t) on March 11. However, due to the impact of environmental protection and production restriction, they have increased to RMB5,800/t (USD900/t) at the moment. Affected by the price fluctuation of steel billet, the raw material, HR strip prices in Tianjin market were also on the rise after the Spring Festival holiday. At present, mainstream prices of HR strip Q235 235mm*2.5mm*C are about RMB6,350/t (USD985/t), which are RMB2,100/t (USD326/t) higher than those in early February, with an increase of nearly 50%.

Asian Metal: The environmental protection in Hebei and other places has been strengthened since March, and the production of many steel mills has been affected. Is there any influence on the production of steel mills in Tianjin?

Mr. Chen: In recent years, according to the requirements of local government and other superior departments to carry out rectification, renovation, etc., HR strip enterprises in Daqiuzhuang of Tianjin have basically met the requirements of environmental protection now. Therefore, nowadays, it is rare to simply stop production due to environmental protection. Besides, we can purchase raw materials of steel billet from various places. In addition to Tangshan and other places in Hebei, we can also buy steel billet from other regions such as Shanxi and Shandong. Therefore, the supply of raw materials is relatively sufficient. From January 28 to February 20, we stopped the production for the Spring Festival Holiday. We have been maintaining the regular production after resuming the production on February 21 and the daily output is stable at about 2,000t.

Asian Metal: What do you think of the market trend in Q2?

Mr. Chen: According to the current situation, environmental protection efforts in North China have increased this year compared with last year. As a result, the production of HR strip mills in many places, especially in Hebei, will be affected to a certain extent, and the supply of HR strip will be reduced. In terms of demand, the overall operating rate of downstream customers is high, and the production is relatively normal. In addition, the large amount of national investment will stimulate the demand of downstream industries to a certain extent. Therefore, I think domestic HR strip prices would maintain a high level in the second quarter.

Asian Metal: What experience do you have in product and market development?

Mr. Chen: Our company always adheres to the business philosophy of "repay the society with high-quality and low-price products, serve customers with sincere and friendly attitude", and the enterprise spirit of "dare to innovate, pursue excellence", constantly gives play to its own advantages, improves internal management, and upgrades the core competitiveness of the enterprise. Our HR strips are based on the local market and radiate to the surrounding areas. We pay special attention to the requirements of our customers from leaders to the front line, and make it fast and convenient from service to information transmission, and try our best to ensure customer satisfaction. We will continue to strive to improve product quality and service attitude, and become the first-class and high-quality HR strip producer in North China.