Liao Jianbo: It is imperative for seamless pipe traders to optimize the structure

Asian Metal: Mr. Liao, thank you very much to accept the interview, could you please introduce major products of Qinxing Company?

Liao: Established in 2003, our company majors in pipes including fluid pipe GB/T8163, high pressure boiler tube GB5310, low and medium pressure boiler pipe GB3087, oil cracking pipe GB9948, fertilizer dedicated pipe GB6479, ship dedicated pipe GB5312 as well as alloy pipe from leading steel mills such as Ansteel, Baotou Steel, TPCO, Hengyang Valin Steel Tube, Pangang Group Chengdu Branch, Xinye Special Steel, Baosteel Lubao Branch and so on.

Asian Metal: Where your materials are sent?

Liao: Our materials are mainly sent to South China, but sometimes they also radiate to Central and Northeast China, just according to project locations of regular customers.

Asian Metal: Please outline the seamless pipe market after the Spring Festival.

Liao: Generally prices of seamless pipe went through an up-stable-down trend in February-March. Most traders expected the market performance would get warmer after the Spring Festival and they were active in supplementing inventories before it. Although the market performed slowly early February, traders lifted quotations by RMB100/t tentatively following leading domestic producers like Baosteel, Baotou Steel, Ansteel, Pangang Group Chengdu Branch as well as TPCO. From Mid-February to early March, prices ran generally stable as most participants were still on holiday. When it entered Mid-March, they kept going down due to price declines of raw materials as well as high inventories.

Despite that leading domestic steel producers maintained ex-works prices firm for April production, small mills in Shandong Province lowered list prices in succession influenced by price declines of raw materials in March. Meanwhile, market participants tended to be pessimistic about the coming market.

Asian Metal: What do you think the current seamless pipe price? Will it go down further in coming weeks?

Liao: Certainly, I think the price of seamless pipe is likely to go down further in the remainder of April. To specify, although the current one runs stable due to participants’ wait-and-see attitude, the market performance remains unsatisfying. Meanwhile, the price of the raw material-tubing blank showed signs of decreasing recently and most traders were pessimistic about the coming market.

In the meantime, the export situation is serious this year with the rise of protectionism and more and more countries launched various anti-dumping investigations upon seamless pipe made in China, thus the Chinese domestic stockpiles increased much.

Asian Metal: What do you think are the reasons that influence the seamless pipe price?

Liao: March-April is the traditional rainy season in South China and the continuous rainy weather makes operation of construction projects slow down or even halt, thus the demand for seamless pipe shrinks much accordingly. In addition, the heavy rainfall delays the shipment for at least three days.

In the meantime, the balance between supply and demand is another important factor that influences the seamless pipe price. If steel mills enlarge output blindly boosted by high profits, the market can not digest it, leading to a price decline eventually.

In addition, price changes of raw materials also play another significant role in seamless pipe market. I learnt that prices of raw materials kept declining recently, heightening seamless pipe market participants’ pessimistic attitude.

Asian Metal: Besides seamless pipe, do you plan to develop other products this year? How to build a harmonious relationship between traders and customers in your opinion?

Liao: Firstly, we need to optimize product structure.

It is important to adjust product species according to downstream customers’ needs. When ordering materials from mills, traders should guarantee the quality and brand, so as to improve bargaining power and increase the acceptance and recognition from end users.

Secondly, we plan to form a logistics distribution center in the integration of procurement, distribution, packaging, storage, transportation, processing and information service, aiming to provide one-stop service for downstream customers.

In the meantime, we are going to trade environmental protection material activated carbon this year. Activated carbon is widely used in the deep purification of domestic water, industrial water as well as waste water, such as the water purification treatment of petrochemical industry, power plants, food and beverage, medicine and fish farming industry. It can adsorp free chlorine, phenol, sulfur and other organic pollutants effectively, especially the mutagenic precursor material, aiming to remove impurity. Besides, it can be used for workshop exhaust gas purification, solvent filtration, decolorization, purification, gas desulfurization, catalytic reforming of oil and gas, pressure swing adsorption and air drying, food preservation, gas masks, media carrier solution, organic solvent recovery, precious metal refining, atalyst and catalyst carrier in chemical industry, etc.

The new government swore to restrict enterprise sewage treatment and also pay high attention to food safety, thus the market prospect for activated carbon is promising. Furthermore, the profit is considerable. For example, its net profit is RMB2,000-3,000 per ton, equaling to that of 10 tons of seamless pipe.

Asian Metal: Thank you again for being with me in the interview and wish everything goes well for your work in the future.

Liao: Thanks.