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Summary: This week saw narrow fluctuations in steel futures and moderate market sentiment. The rising U.S. dollar and offshore RMB hitting 7.25 added global uncertainty, while China's central bank injected liquidity and export growth spread across 25 provinces. Seamless pipe production and inventory increased as northern mills resumed operations, yet market demand remained weak. As of November 22, seamless pipe prices in major cities continued to decline.
Seamless Pipe Prices: As of November 22, the national average price of 108*4.5mm seamless pipes across 28 major cities stood at RMB 4465/ton, a weekly decrease of RMB 44/ton.
Raw Materials: Raw material prices saw mixed trends, with Shandong billet prices rising RMB 40/ton and Jiangsu billet prices increasing RMB 60/ton. The price gap between the two regions widened slightly.
Pipe Mills: Most pipe mills maintained stable prices, with occasional adjustments of RMB 30-50/ton.
Profitability: Seamless pipe producers faced shrinking margins due to rising raw material costs. For example, Shandong-based sample mills reported losses of RMB 120/ton, down RMB 120/ton from the previous week.
Market Trends: Shandong billet prices rose by RMB 40-60/ton this week, while seamless pipe prices dropped by RMB 50-100/ton in response to weak sales. Traders aggressively cut prices to stimulate shipments, while manufacturers prioritized inventory reduction through discounts.
Demand and Inventory: With colder weather affecting demand, sales volumes remained low. However, end-of-year construction deadlines may boost downstream procurement in the coming weeks.
Outlook: Seamless pipe prices in East China are likely to stabilize or show slight increases next week amid potential downstream restocking efforts.
Social and Factory Inventories: Nationwide seamless pipe inventories fell slightly to 67.17 million tons, down 0.35 million tons week-on-week. Factory inventories increased by 1.47 million tons to 70.19 million tons, reflecting rising production levels as northern mills resumed operations.
Production Activity: Weekly production reached 30.62 million tons, up 1.67 million tons from the previous week. Capacity utilization grew by 3.62% to 66.54%.
Price Trends: Rising raw material costs may limit the scope for further price cuts, though weak demand continues to weigh on the market.
Supply and Demand: The easing of production restrictions in northern regions has led to increased output, further pressuring the supply-demand balance during the seasonal demand lull.
Market Sentiment: Traders remain cautious amid fluctuating prices, with limited downstream purchasing activity.
Conclusion: With the seamless pipe market entering its seasonal low, weak demand and rising inventories are creating supply-side pressure. Prices are expected to see further slight declines next week.
