According to the China Iron & Steel Association (CISA), its member enterprises overall were profitable in the first half of 2016, mainly because of the recovery in steel prices. Steel pipe producers appear unable to take advantage however as oil and gas investment slumps, Kallanish notes.

CISA members saw H1 total profits of CNY 12.58 billion ($1.89 billion), up 427% year-on-year, as seventeen out of nineteen listed members reporting results so far were profitable. Among them Baosteel, Liugang, Sangang Minguang, Jiugang Hongxing, Anyang Steel and Shagang all returned to profitability.

Notably however, almost all pipemakers saw their performance decline in H1 2016. The core reason for this is the sharp decline in investment in energy extraction. Over January to July China's national fixed asset investment in the extraction of petroleum and natural gas decreased by -28.01% year-on-year according to official data from the National Bureau of Statistics.

Company 2016 H1 Net pofit (CNY m) y-o-y Growth 2016 H1 Business Income (CNY billion) y-o-y Growth
Xinxin Ductile Iron Pipes 190 -45.95% 26.93 -6.54%
Nanjing Iron and Steel 146 317.82% 10.87 -8.36%
Liuzhou Iron and Steel 79 return to profit 12.28 -7.29%
Zhejiang Jiuli High-tech Metals 63 -15.02% 1.31 1.15%
Jiangsu Changbao Steel Tube 56 -38.25% 1.05 -24.14%
Kingland Pipeline 53 -3.63% 1.15 -14.76%
Baotou Iron and Steel 28 return to profit 12.04 4.66%
Shandong Iron and Steel 23 210.57% 21.96 -4.54%
Zhongyuan Special Steel -48 lossed increased 0.476 -16.24%
Pangang Group Vanadium Titanium and Resources -836 losses increased 5.87 -4.65%

Source:CISA