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Overview: This week, black futures fluctuated widely as strong macro expectations clashed with weak reality, increasing market uncertainty. Internationally, the U.S. presidential election concluded, and the Federal Reserve cut interest rates by 25 basis points in November 2024. The Eurozone's manufacturing PMI rose to 46.0 in October, though it remains below the 50 mark.
Domestically, China's National People's Congress passed a decision to allocate 800 billion yuan annually for five years from new local government bonds to help reduce debt. Meanwhile, the PBOC conducted a 7-day reverse repo operation. In the steel sector, northern pipe manufacturers resumed production after environmental restrictions eased, providing room for increased seamless pipe output. As the traditional off-season begins, demand remains generally weak, with seamless pipe prices in major cities slightly declining as of November 8.
Pricing Trends: Mysteel data shows the national average price for 108*4.5mm seamless pipes in 28 major cities was 4,521 yuan/ton as of November 8, reflecting a weekly decrease of 21 yuan/ton.
Raw Materials: Raw material prices rose slightly this week, with Shandong pipe blanks up 20 yuan/ton and Jiangsu pipe blanks up 40 yuan/ton, widening the price gap between the two regions.
This week, profits improved slightly for pipe manufacturers due to narrow fluctuations in raw material prices. For instance, seamless pipe manufacturers in Shandong reported a profit of -40 yuan/ton, up 30 yuan/ton from last week, while those in Jiangsu reached 260 yuan/ton, an increase of 140 yuan/ton.
Pipe blank prices in Shandong rose by 20 yuan/ton, while most seamless pipe prices remained stable, with only minor declines in some markets. In Shanghai, the seamless pipe price is 4,590 yuan/ton, while in Nanjing, it's 4,340 yuan/ton, and in Hangzhou, it stands at 4,500 yuan/ton. Market demand showed no significant improvement, with a cautious outlook among traders.
According to Mysteel data, national seamless pipe social inventory was 677,700 tons, down by 9,100 tons. Factory inventories decreased to 675,700 tons, with a slight increase in raw material inventory.
This week's output reached 289,600 tons, with a utilization rate of 62.92%. In Shandong and Hebei, manufacturers resumed production, and further output increases are expected next week as environmental restrictions are lifted.
This week, pipe prices dropped before rebounding slightly, though the demand in the north remains weak. With the onset of the off-season and declining downstream demand, supply pressure remains high. Market sentiment is generally cautious amid ongoing macro developments. In summary, seamless pipe prices are expected to fluctuate narrowly next week as demand weakens further.
