Overview
In 2024–2025, China’s national oil & gas infrastructure and municipal pipeline investments remain robust. The “National Unified Pipeline Network” strategy, along with projects such as the Power of Siberia gas pipeline and regional trunk lines, continues to drive demand for large-diameter pipes. At the same time, fluctuations in hot-rolled coil (HRC) prices and manufacturing activity affect profit margins for pipe producers. New standards, including GB/T 9711-2023 and the latest API 5L (46th edition), are shaping quality requirements for pipeline projects.
1. Industry Characteristics: Applications Defined by Welding Process
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Spiral Submerged Arc Welded (SSAW) Pipes: Produced from narrower coil to achieve large diameters at lower cost, widely used in long-distance water transmission, municipal projects, and medium- to low-pressure oil & gas lines.
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Longitudinal Submerged Arc Welded (LSAW) Pipes: Superior in wall thickness control, strength, and dimensional accuracy, making them the preferred choice for high-pressure oil & gas trunk lines and offshore projects.
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Electric Resistance Welded (ERW) Pipes: Focused on small to medium diameters, commonly used in city gas distribution, structural applications, and process pipelines.
Standards are crucial: API 5L defines PSL1/PSL2 levels up to X70–X80 steel grades, while GB/T 9711-2023 (effective since March 2024) aligns more closely with API requirements, including provisions for hydrogen service.
2. Demand Trends: Oil & Gas, Water Infrastructure, and Emerging Hydrogen Transport
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National Pipeline Projects
China’s “National Unified Pipeline Network” continues to expand, with trunk lines such as the Power of Siberia nearing full operation. This sustains demand for large-diameter LSAW and SSAW pipes, especially in X70/X80 grades. -
Natural Gas Consumption & Storage
As natural gas plays a bigger role in replacing coal and stabilizing power supply, investments in gas storage and transmission pipelines are increasing, directly boosting high-grade pipe demand. -
Hydrogen Energy Outlook
China’s hydrogen roadmap highlights pilot projects in mixed hydrogen transport and localized distribution. New standards such as GB/T 9711-2023 anticipate stricter material requirements for hydrogen service, opening opportunities for specialized pipe manufacturing. -
Municipal Water Supply
Water diversion and urban water pipeline renewal projects continue to support steady demand for large-diameter SSAW pipes.
3. Cost & Pricing: Hot-Rolled Coil as a Key Driver
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HRC Price Volatility: Since mid-2025, HRC prices have fluctuated around RMB 3,400/ton, with seasonal restocking and cost pressures driving short-term increases. This directly impacts pipe producers’ margins.
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Profitability Challenge: Large contracts now require more flexible pricing mechanisms (index-based or tiered quotations) to offset raw material risks.
4. Macroeconomic & External Factors
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Manufacturing Activity: China’s PMI indicators in mid-2025 suggest uneven recovery, with investment-driven projects offering more certainty than spot market demand.
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Steel Output Control: The government’s crude steel reduction policies for 2025–2026 may tighten supply, supporting HRC and pipeline steel pricing.
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Geopolitics & Gas Security: Negotiations on new cross-border pipelines such as “Power of Siberia 2” highlight the long-term strategic role of trunk lines, but timelines remain uncertain.
5. Economic Impact on the Value Chain
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Steel Mills: Shift toward high-strength pipeline steel (X70/X80) and value-added services such as acid-pickled, cut-to-length plates.
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Pipe Producers:
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LSAW retains its advantage in high-pressure applications.
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SSAW remains cost-effective for municipal and water projects.
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Margin pressure requires stronger raw material hedging strategies.
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EPC Contractors & Owners: Standards upgrades increase emphasis on life-cycle cost, weld toughness, and advanced non-destructive testing (UT, TOFD, DWTT).
6. Strategic Recommendations
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Strengthen LSAW Capacity for High-Grade Projects: Enhance PSL2/X70+ capabilities, including fracture toughness and sour service testing.
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Expand SSAW Solutions in Water Infrastructure: Offer anti-corrosion and lining options to meet municipal project requirements.
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Adopt Raw Material Risk Management: Use HRC index-based pricing clauses to mitigate volatility.
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Prepare for Hydrogen Transport: Engage in pilot projects and invest in hydrogen-compatible materials.
Key Standards
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API 5L (46th Edition): Global benchmark for oil & gas pipelines, covering PSL1/PSL2, B–X80 steel grades.
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GB/T 9711-2023: New Chinese standard (effective March 2024), harmonized with API 5L, and updated for hydrogen readiness.
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