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The seamless steel pipe market has transitioned into a period of stagnation as we approach the end of May. The arrival of the rainy season in Southern China has significantly hampered terminal project progress, leading to a noticeable softening in demand. While the market previously maintained a "tight balance," current dynamics suggest a move toward a buyer's market. With trade-house inventories accumulating and logistical transfers from mills to social warehouses proving inefficient, market sentiment has turned cautious.
Price Stability: As of May 22, the national average price for 108*4.5mm seamless pipe remained steady at 4,314 RMB/ton, essentially unchanged from the previous trading period.
Cost-Side Relaxation: Raw material tube blanks saw a modest downward correction. Shandong blank prices dropped by 40 RMB/ton, while Jiangsu prices dipped by 20 RMB/ton. This resulted in a widened North-South price gap of 190 RMB/ton.
Profitability Divergence: Regional mill profits show a "k-shaped" recovery:
Shandong Mills: Profits improved to 90 RMB/ton (up 30 RMB/ton).
Jiangsu Mills: Profits contracted to 120 RMB/ton (down 10 RMB/ton).
Supply & Inventory:
Production: Weekly output declined to 403,400 tons (down 3,400 tons).
Inventory: Social (trader) inventory grew slightly to 707,000 tons, signaling that stock is moving from factory gates to merchant yards, where it is currently struggling to move due to weakened downstream purchasing.
For the upcoming week, the market outlook leans toward a steady-to-weak adjustment. Several factors are driving this:
Seasonal Demand Decline: The mid-to-late May period typically sees a natural deceleration in construction and industrial procurement, which is now exacerbated by weather-related constraints.
Inventory Inefficiency: While factory stocks have eased, the buildup of social inventory (trader stocks) indicates reduced turnover efficiency. Merchants are facing end-of-month cash flow pressures, which often leads to price-cutting to stimulate liquidity.
Cost Support Weakening: The recent dip in raw material tube blank prices removes a key pillar of "price support" that kept the market firm in early May.
The current climate suggests a wait-and-see approach may be beneficial for international buyers planning large-scale procurement. Since terminal demand is cooling and local traders are facing pressure to clear stock for end-of-month financial settlement, opportunities for more favorable pricing may emerge in the coming 7–10 days.
However, given that major mills remain committed to defending their price floors, we do not expect a crash. Instead, look for a controlled, incremental adjustment. Now is the ideal time to discuss flexible delivery terms and volume discounts with your Chinese suppliers.
