In the first half of 2016，the market prices and profits of steel pipe tend to be better slightly, especially from March to April, showing a surprise situation. The seamless pipe rose from 2250 yuan per ton in January, to 2390 yuan per ton in June, had the total rises of about 140 yuan per ton; Market profits from loss to profit to 50 yuan per ton. The welded pipe (4 inches) from 2030 yuan per ton in January, up to 2260 yuan per ton, had the cumulative rises of about 230 yuan per ton; Market profits rose from 35 yuan per ton to 100 yuan per ton. Of course, there are some areas near the edge of at a loss. It is easy to be seen from the trends: First, the upward trend is obvious, although it had quite big fluctuation, its drop space is narrow, with short duration and weak strength; The overall situation showed a stronger signal, comparing with the same period last year. The situation of steel pipe market is fine in the first half year. Second, compared with a peak of 2014-2015, this year's steel market has rebounded space. It rose and fell obviously. It soared from March to April, and tumbled from May to June. These reflect that the market began to adjust gradually and to return to rational price. There are three major reasons: first, the first half of the year is the period of national policy adjustment; The large policy has just been established; All kinds of domestic economic stimulus policies were introduced frequently, adding the economic concept of "steady growth"; Especially, because of the environmental protection policy of perseverance, the supply and demand status of pipe market had reversed. Second, under the circumstance of low market prices, low profits, low trading desire of last year, steel pipe market will recover and be supported. Third, the restructuring process of steel pipe market is very slow. Although some small factories closed down, big plants still maintain high survival rate. Making a profit with quantity has became the most common trick of steel pipe factory. 

As for the market of the second half year, insiders have different opinions. More than half of the companies express that steel prices will not be optimistic. After all, pipe market dilemma has not lift yet. Although there are rises in the first half year, the market is difficult to convince. And there is a fact that steel market had down again. However, industry insiders said that it’s no need to be too pessimistic about the market. When the market fell to a very low price, it will rebound naturally; Especially, many manufacturers are in?conflict?with slashing prices, and the psychological price of raw material also be supported. These are enough to ensure the market of the second half year won't fluctuate too much. Based on the market in the first half year, experts said that the market should maintain turbulence, fluctuations will be clear gradually; Of course, it is less likely to surge again, and it has no significance; To be sure, there is a wave, but the amount of increase will not surpass that in the first half year. It will?barely?exceed?the level of last year. Analysis can be done from the following aspects: 

1. Supply and demand; Supply: The demand in the first half year has not been improved and this showed the gap between supply and demand. But compared with 2014 and 2015, stock inventory is reducing gradually year-on-year or in chain. This is a good thing, also reflecting the strength of environmental protection. Moreover, because of environmental problems, now general pipe factory tend to maintenance than stopping produce. For example, compared with the last year, the output of galvanized steel pipe reduced by half. As a result, it will be difficult to call back ex-factory price. For the second half year, supply won’t change too much. Demand: it is certainly that steel demand will not have the too big highlight effect in the second half year. On the one hand, the real estate is popular, and it drove the demand of steel more or less; But in the second half of the year, purchase?restrictions has introduced in various regions; Real estate has gradually cooled down again; So it is hard to break through the demand. On the other hand, there are many problems with export, especially in domestic seamless pipe export, basically, a lot of countries have an anti-dumping investigation on China seamless pipe. In addition, this year's steel exports tax investigation will further affect the domestic exports of steel. This kind of situation is difficult to make up in short term, especially in the big background of the digestion of domestic steel. 

2. Policy: Firstly: the data of the second quarter shows that the domestic economy is not good as the first quarter. It should be no problem to grow by 6.7%. As for the second half year, China will not easily introduce monetary stimulus policy. Only when the economy is very bad, there will be targeted local loosening monetary policy. Of course, this is not absolute. At least, from the first half of the year, China does not have necessary to stimulate like last year. Secondly: it is estimated that real estate will not so popular in the second half of this year. Besides, the most main policies for iron and steel industry are elimination capacity, merger and reorganization, and environmental protection, etc.; If these policy are given a new definition, or even a overweight, steel prices may rise. Conversely, if let nature take its course, the market price will not become better. 

3. Mentality: First, operational capability is mainly related to capital, market, and demand, etc. Also, it needs to consider the risk of spot stock and the liquidity of resources. In view of the current poor prices and the uncertain environment of steel pipe market, general users can consciously reduce inventory resources, with a little stock; Large companies stock less than 1000 tons, small companies stock below one hundred tons. On the one hand, less inventory will steer the risk of pressure to pipe factory, so as to price flexibly; On the other hand, it can also deliver to pipe factory straightly or transshipments. That is to say, there are three kinds of management options. In this way, even if the pipe price decline rapidly, they still won't loss too much money. Certainly, inventory reduction does not means that the funds liquidity resistance will reduce; The key to liquidity is the downstream terminal engineering and trading atmosphere, and the weather, traffic and other factors. As for the second half year, good factors will appear only in the "golden nine silver ten". It’s difficult to have new breakthrough in the rest of the season. This is a limitation for the market in the second half year. In general, it should be treated with caution and operated carefully.