The price of welded steel pipe will increase by less than 10%

　　The trend of mine price will be relatively strong. It is expected that the price of welded steel pipe will increase by less than 10%, and the industry's profitability will improve. Under the supply-side reform, excess capacity will accelerate clearance, steel enterprise reform and transformation are expected to accelerate; in the process of economic restructuring and upgrading, ASTM A53 Grade B X70 Carbon Welded Steel Pipe will assume heavy responsibilities in military industry, nuclear power, aerospace, automobile, high-speed railway and other fields; the approval of the new Guangdong-Zhejiang line marks the acceleration of oil and gas pipeline network construction in China, and the structural growth of the steel industry deserves special attention. We maintain the "buy" rating of the steel industry, and focus on recommending the leading sectors of profitability in terms of clearer profits, lower valuation levels and better mobility, as well as the main investment opportunities such as SOE reform, along the way, and integration of Beijing, Tianjin and Hebei.

　　In January, the weather became colder, the downstream start-up rate further weakened, and the demand side remained weak. In December 2018, deep steel demand continued to weaken in the off-season. In January 2019, production of welded steel pipe mills declined or not increased, welded steel pipe will continue to be optimistic, and industry profits are expected to continue to rebound. On the supply side, PMI of steel production rose sharply to 38.5% in December, but contracted for 16 consecutive months. Economic downward pressure is not reduced, steel demand terminal is weak, and production continues to decline, but the intensity is weakened. In January, near the Spring Festival, terminal demand has further weakened, steel enterprises stop production has decreased or not increased, and the supply side has weakened. On the demand side, the new order index and the new export order index increased significantly in December, rebounded after reaching a five-month low, and the downstream demand contracted slowly. The new export order index rose by 6.60% to 47.80%, and rebounded for two consecutive months. The international steel market is moderate and recovering, and export demand is expected to continue to improve.