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Overview: This week, the prices of black-series futures have significantly weakened, and the market trading atmosphere remains average, with cautious confidence among traders. On the international front, increasing uncertainties have driven gold prices to new highs, and the European Central Bank has cut interest rates by 25 basis points. Domestically, China's CPI in September was up 0.4% year-on-year, while PPI fell by 2.8%. China's GDP for the first three quarters reached 949,746 billion RMB, growing by 4.8% with strong policy expectations.
Seamless pipe production has slightly rebounded from low levels. Raw material prices are running weakly, and the immediate profits for seamless pipe manufacturers in Shandong continue to shrink. Orders at manufacturers are average, and inventory needs further digestion, leading to downward price adjustments at most manufacturers. As of October 18, the average price of seamless pipes in 28 major cities has mostly fallen.
Price Aspects: According to Mysteel's data, as of October 18, the average price for 108*4.5mm seamless pipes in 28 major cities is 4,596 RMB/ton, a week-on-week decrease of 48 RMB/ton, with most mainstream market prices weak.
Raw Material Prices: As of this Friday, raw material prices have clearly weakened, with Shandong pipe billet prices dropping by 160 RMB/ton and Jiangsu's by 80 RMB/ton, widening the price gap between Jiangsu and Shandong.
Manufacturer Pricing: Mysteel’s survey of 34 sample seamless pipe manufacturers indicates that most mainstream seamless pipe prices have been lowered this week, with some factories reducing prices by 50-100 RMB/ton.
Profit Aspects: Regarding seamless pipe profitability, the increase in finished product prices has not matched the rise in raw materials, leading to squeezed profits for Shandong pipe manufacturers. In Jiangsu, seamless pipe prices remain relatively firm, allowing profits to grow. For example, the profit for seamless pipes (20# hot-rolled, Ф108*4.5mm) in Shandong is 420 RMB/ton, a decrease of 80 RMB/ton week-on-week, while Jiangsu's profit is 600 RMB/ton, an increase of 40 RMB/ton from last week. Recent fluctuations in pipe billet prices may lead to significant adjustments in manufacturer profits.
Eastern China Region Commentary: This week, hot-rolled pipe billet prices in Shandong and Jiangsu fell by 80-100 RMB/ton, and some mainstream manufacturers in Shandong adjusted seamless pipe factory prices downwards by 50-150 RMB/ton. In East China, some mainstream market prices rose by 200-220 RMB/ton, with Shanghai's seamless pipe price at 4,640 RMB/ton, up 200 RMB; Nanjing and Hangzhou markets rose to 4,470 and 4,660 RMB/ton respectively, with adjustments larger than last week. Although raw material prices rose significantly, the market prices have lagged, with overall weak replenishment willingness among traders and lingering fears of price drops. After the National Day, market transactions improved slightly, and traders remain cautiously optimistic about October. However, the range of price fluctuations has widened without strong support. It is expected that seamless pipe prices in East China will mainly exhibit weak fluctuations in the short term.
Inventory Aspects: According to Mysteel's survey of nationwide seamless pipe inventory (123 traders), the total social inventory of seamless pipes is 695,600 tons, remaining stable week-on-week. For the 33 surveyed manufacturers, internal inventory is 712,400 tons, down 12,500 tons week-on-week and 20,200 tons year-on-year; raw material inventory is 281,300 tons, down 1,600 tons week-on-week and up 400 tons year-on-year. After the festival, the market has cooled, and manufacturers are actively reducing inventories, leading to slight decreases in factory inventories, while social inventories have stabilized. Next week, social inventories may continue to decrease slightly.
Production Aspects: This week, production reached 322,100 tons, a week-on-week increase of 12,900 tons and a month-on-month increase of 14,200 tons; capacity utilization is at 69.99%, up 2.8% week-on-week and 3.09% year-on-year; operating rate is at 54.1%, up 1.64% week-on-week and 0.82% year-on-year. Following the pre-holiday inventory buildup, manufacturers' operating rates have slightly rebounded, and steady operation is expected this week.
Market Forecast: From a pricing perspective: Raw material prices have fallen rapidly this week, prompting mainstream seamless pipe manufacturers to cut prices by 50-100 RMB, with market prices continuing to decrease, reducing short-term cost support.
From a fundamental viewpoint: As we enter the traditional off-season, market demand is lukewarm, with traders primarily replenishing based on need; seamless pipe production may have room for increase, and factory inventories may see slight rises next week. Overall, there is a dual weakness in supply and demand.
From a sentiment perspective: Continuous macro positives persist, but real expectations remain cautious. Downstream customers still face tight funding, with insufficient large project starts, leading traders to focus primarily on sales.
In summary, with relatively strong macro expectations, seamless pipe prices are predicted to maintain narrow fluctuations next week.
