Mysteel Weekly Report: Seamless Pipe Prices to Edge Lower Amid Inventory Shifts (Mar 7-14, 2025)

Market Overview

The seamless pipe market enters a critical transition phase, with mill inventories dropping 1.19 million tons weekly while social stocks creep upward (+0.12 million tons). Despite a 0.51 million ton production increase, prices slipped 16 RMB/ton nationally to 4,414 RMB/ton as demand recovery lags behind supply growth. Global economic signals remain mixed - UK GDP disappointments contrast with China's 8.2% social financing growth, creating complex pricing dynamics.

Price & Cost Analysis

Regional Price Movements

• Eastern China Dominates Weakness:
  Shanghai prices fell to 4,420 RMB/ton (-50 WoW)
  Nanjing dipped to 4,260 RMB (-40 WoW)
  Hangzhou settled at 4,360 RMB (-60 WoW)

Raw Material Divergence

• Shandong billets: 3,620 RMB/ton (+30 WoW)

• Jiangsu billets: 4,120 RMB/ton (-10 WoW)

• Regional spread narrows to 500 RMB (from 540 RMB)

Mill Profit Squeeze

• Shandong producers sink deeper into losses: -80 RMB/ton (-80 WoW)

• Jiangsu margins hold at 190 RMB/ton through export optimization

• Industry-wide profitability index drops to 42 (100=break-even)

Inventory & Production Dynamics

Stockpile Migration

• Mill inventories: 618,900 tons (-1.9% WoW, -4.6% MoM)

• Social inventories: 717,700 tons (+0.17% WoW)

• Critical threshold: Social stocks approaching 725,000 ton capacity ceiling

Capacity Expansion

• Weekly output hits 346,000 tons (+1.5% WoW)

• Operating rates climb to 75.18% (+1.11pp WoW)

• 8 mills resume production, adding 120,000 ton monthly capacity

Demand & Macro Crosscurrents

Domestic Challenges

• Southern rainfall disrupts 23% of construction projects

• Trader restocking reluctance: 68% maintain below-average inventories

• Policy wildcard: Hohhot's childbirth subsidies signal regional stimulus experiments

Global Headwinds

• UK rate cut expectations rise to 56bps for 2025

• US PPI at 3.2% fuels inflation vigilance

• ASEAN import inquiries drop 12% MoM on tariff concerns

Market Forecast & Strategic Insights

Price Projections

• Immediate Outlook: 4,380-4,420 RMB/ton range testing

• Downside Risks:

• Social inventories exceeding 725K tons

• Jiangsu billet prices breaking 4,100 support

• Potential Stabilizers:

• Infrastructure bond disbursements accelerating

• Export rebates for high-grade pipes (draft proposal circulating)

Operational Recommendations

1. Inventory Strategy:

• Mills: Maintain 18-22 day production coverage

• Traders: Cap stocks at 25 days with futures hedging

2. Cost Control:

• Lock in Shandong billets below 3,650 RMB via forward contracts

• Increase scrap ratio to 28% where feasible

3. Market Positioning:

• Target export markets with EN 10208 certification readiness

• Monitor Yangtze River Delta infrastructure tender announcements