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Overview: This week, the steel market experienced fluctuations, with demand entering a seasonal lull and trade volumes declining. Globally, U.S. initial jobless claims dropped unexpectedly, while Sweden's central bank reduced its benchmark interest rate by 25 basis points to 2.5%. Domestically, the last LPR of 2024 remained stable, with expectations of further reductions in 2025. Meanwhile, China's October U.S. Treasury holdings fell to $760.1 billion, marking a 15-year low. Pipe mills faced order shortages as demand in northern regions weakened significantly, coupled with frequent billet price adjustments, leading to increased maintenance activity. By Dec. 13, seamless pipe prices in major cities remained largely stable.
Seamless Pipe Prices: As of Dec. 20, the average price of seamless pipes (108*4.5mm) in 28 major cities was 4,451 RMB/ton, up by 4 RMB/ton from the previous week. Most mainstream markets maintained stable pricing this week.
Raw Material Prices: Raw material prices remained relatively firm. Billet prices in Shandong fell by 100 RMB/ton, while Jiangsu billet prices declined by 30 RMB/ton, leading to a significant price gap between the two regions.
Pipe Mill Adjustments: Among 34 sampled pipe mills, mainstream seamless pipe prices saw a drop, with increases ranging between 30-50 RMB/ton.
Profits showed mixed performance across regions:Shandong: Sampled seamless pipe mills recorded an average profit of -20 RMB/ton, a decrease of 20 RMB/ton from last week. Jiangsu: Profits improved to 70 RMB/ton, up by 70 RMB/ton week-over-week.
Shandong billet prices decreased by 100 RMB/ton week-over-week, with seamless pipe factory prices remaining unchanged.
Seamless pipe prices in East China held steady, with some cities experiencing minor price hikes due to shortages.
Trade volumes remained average, and mills primarily relied on price reductions to stimulate sales.
Social Inventory: Social inventory for seamless pipes across 123 traders fell by 0.53 million tons this week, totaling 65.43 million tons.
Factory Inventory: Factory inventories of 33 sampled mills decreased by 2.83 million tons week-over-week to 65.50 million tons.
Weekly output: 291,400 tons (down 25,500 tons week-over-week; 31,200 tons month-over-month).
Capacity utilization rate: 63.93% (down 4.93% week-over-week).
Operating rate: 45.69% (down 5.13% week-over-week).
Northern environmental restrictions and demand weakening have prompted major pipe mills to schedule more maintenance, leading to production cuts.
Price Trends: With billet prices declining and most pipe mills maintaining stable prices, the seamless pipe market is expected to see reduced volatility before the upcoming holiday season.
Supply and Demand: Seamless pipe demand continues to weaken amid seasonal factors, while supply is shrinking due to maintenance schedules and reduced production.
Sentiment: Market players remain cautious amid fluctuating trends and limited downstream purchasing activity.
Conclusion: As the market enters its seasonal lull, both supply and demand are weakening, creating a cautious atmosphere. Seamless pipe prices are expected to stabilize or experience minor fluctuations next week.
