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Overview: This week, black futures rose and then fell back, resulting in a cautious trading atmosphere. Internationally, the U.S. Q3 GDP growth rate was initially reported at 2.8%, below expectations, as the presidential election countdown continues. Domestically, the manufacturing PMI for October was at 50.1%, indicating a return to expansion, with strong expectations for favorable macro policies ahead of significant upcoming meetings.
For seamless pipe manufacturers, raw material prices fluctuated, and the current profits for seamless pipe plants in Shandong remained low. The production enthusiasm among processing plants was generally weak due to multiple local environmental restrictions, leading to a continued decline in seamless pipe output. The market is entering the traditional off-season, and demand is performing moderately. As of November 1, seamless pipe prices in major cities showed slight increases.
Price Dynamics: According to Mysteel's data, the average price of 108*4.5mm seamless pipes in 28 major cities was reported at 4,566 yuan/ton, reflecting a weekly increase of 12 yuan/ton, with most major market prices showing stability and slight increases.
Raw Material Prices: By the end of this week, raw material prices fluctuated, with Shandong pipe blank prices increasing by 20 yuan/ton and Jiangsu by 10 yuan/ton. The price gap between Jiangsu and Shandong pipe blanks narrowed slightly.
The profit margins for seamless pipe manufacturers continued to decline due to high blank prices, which were not matched by the product prices. For example, seamless pipe manufacturers in Shandong reported a profit of -70 yuan/ton, down 40 yuan/ton week-over-week, while those in Jiangsu reported 120 yuan/ton, also a decrease of 40 yuan/ton.
This week, hot-rolled pipe blank prices in Shandong and Jiangsu fell by 70 and 30 yuan/ton, respectively. Prices for some seamless pipes from Shandong manufacturers adjusted by 20-150 yuan/ton. In Eastern China, mainstream markets reported weekly price declines of 50-80 yuan/ton. Despite the noticeable drop in raw material prices, market price adjustments were slow, with weak replenishment intentions from traders due to ongoing bearish sentiments.
Mysteel's data showed that national social inventory for seamless pipes stood at 686,800 tons, down by 4,400 tons. Factory inventories decreased to 677,500 tons, a reduction of 35,200 tons week-over-week.
This week's production reached 284,400 tons, with a utilization rate of 61.8%. Profits and order conditions for pipe manufacturers are generally weak, and with environmental restrictions in northern regions, production may see a rebound once restrictions are lifted.
Looking ahead, the mainstream seamless pipe market is expected to fluctuate slightly upward due to rising costs in pipe blanks. However, overall supply-demand remains weak, with limited growth in demand. Downstream clients continue to face financial pressures, contributing to cautious market sentiment. With the convergence of macro news and domestic meetings expected to boost market confidence, seamless pipe prices may see slight increases next week.
