Repeated investment and construction lead to overcapacity. The past two years, China's steel pipe unit put into operation not only on quantity and high levels of equipment, particularly seamless steel tube units there are over more than 10 lines put into operation, in which mill has 10 lines. In addition, some non-steel-pipe producers in so far built or proposed steel project. Steel overcapacity situation in recent years this will lead to further expansion, not only increases the investment risk and increased market competition, also interferes with the steel price stability. This is China's steel price in the main reason for unreasonable prices.