Mysteel Weekly Report: Seamless Pipe Prices to Fluctuate Amid Supply Recovery (Feb 21-28, 2025)

Executive Summary

• Price Trend: National seamless pipe prices hold steady at 4,433 RMB/ton (108×4.5mm)

• Critical Drivers:

• 73.03% industry capacity utilization (+3.46pp WoW)

• 1.6 million-ton weekly output (+5% WoW)

• Fed rate cut probability surges to 68% post-US inflation data

• Market Alert: Social inventory hits 719,460 tons (+0.57% WoW) as downstream demand lags

I. Weekly Market Dynamics

Price Movements

• National Average: 4,433 RMB/ton (+1 RMB WoW)

• Shanghai/Nanjing/Hangzhou: 4,450/4,280/4,380 RMB (Unchanged)

• Raw Material Costs:

• Shandong billet: 3,920 RMB (-20 WoW)

• Jiangsu billet: 4,150 RMB (-30 WoW)

• Regional price gap narrows to 230 RMB

Mill Profitability

• Shandong Mills:

• Negative margins deepen to -30 RMB/ton (-30 WoW)

• Cost pressures from legacy high-priced inventories

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II. Inventory & Production Analysis

Stockpile Status

• Social Inventory: 719,460 tons (+0.57% WoW)

• Eastern China: +1.2% (Pre-season restocking)

• Southern China: +0.8% (Delayed project starts)

• Mill Inventories:

• Finished goods: 634,100 tons (-0.05% WoW)

• Raw materials: 299,500 tons (-1.9% WoW)

  
  

Production Surge

• Weekly Output: 337,400 tons (+5% WoW)

• Operational Metrics:

• Capacity utilization: 73.03% (3.46pp gain)

• Operating rate: 51.64% (18.85pp YoY increase)

• Strategic Shift: 23% mills adopt JIT production to reduce buffer stocks

III. Regional Focus: East China Market

• Price Stability: 4,380-4,450 RMB range maintained

• Inventory Build-up:

• Social stocks up 1.8% with cautious March pre-stocking

• Specialty grades account for 15% of new arrivals

• Trader Sentiment:

• 65% maintain "hold" strategy pending policy clarity

• 30% securing futures contracts (CIOPI at 451.2)
  

IV. Macro-Policy Catalysts

Global Impacts

• Fed rate decision (March 3): 25bps cut priced in

• Dollar index strengthens to 104.3 (+0.8% WoW)

Domestic Drivers

1. Two Sessions Preview:

• Expected steel VAT adjustments (17%→15% draft)

• Infrastructure bond quota expansion (+18% YoY)

2. Seasonal Transition:

• 60% downstream projects to resume by March 10

• Northern China thaw timeline: March 12-18

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V. Market Forecast & Strategies

Price Projection

• Bull Case (30% probability): 4,450-4,480 RMB range

• Requires: Fed dovish signal + accelerated restocking

• Base Case (50%): 4,420-4,450 RMB fluctuation

• Bear Case (20%): 4,400 support level test

Operational Playbook

1. Inventory Management:

• Hold 40-50 days of high-turnover specs (219mm below)

• Rotate 15% stocks through cross-regional arbitrage

2. Pricing Tactics:

• Implement zone-based pricing (5 RMB/ton/km gradient)

• Hedge 25% exposure via SHFE rebar futures

3. Policy Positioning:

• Monitor Two Sessions steel policy roadmap (March 5 release)

• Pre-qualify for urban renewal tenders (Q2 rollout)