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As we close out May, the seamless steel pipe market is signaling a shift toward bearish territory. Despite a modest nominal price increase in some segments, the fundamentals have weakened: tube blank prices are softening, manufacturer inventories are rising, and downstream demand—already hindered by seasonal rains in the south—is bracing for the traditional "off-season" of June. For global buyers, the market is currently caught in a disconnect between factory-side price holding and actual demand-side weakness, creating a high-pressure environment for distributors.
Price Dynamics: As of May 29, the national average price for 108*4.5mm seamless pipe was 4,327 RMB/ton, a marginal weekly increase of 13 RMB/ton.
Weakening Cost Support: Raw material tube blanks trended downward. Shandong blanks fell by 10–20 RMB/ton, while Jiangsu blanks dipped by 0–10 RMB/ton. The price gap between North and South has widened to 200 RMB/ton.
Margin Compression: Profitability for secondary rolling mills (adjusting mills) is tightening.
Shandong Mills: Profits held steady at 90 RMB/ton.
Jiangsu Mills: Profits dropped significantly by 40 RMB/ton to just 80 RMB/ton.
Inventory and Supply Pressures:
Production: Weekly output increased to 411,100 tons (up 7,700 tons), pushing capacity utilization to 82.45%.
Stockpiles: Factory inventories surged to 771,400 tons (a weekly increase of 21,400 tons), and social (trader) inventories remained high at 709,100 tons.
We project that seamless pipe prices will trend toward a "weak adjustment" in the coming week. The rationale is three-fold:
Over-Supply at the Factory Level: Unlike the previous weeks, factory inventories are now increasing rapidly. This indicates that supply is outstripping real-world consumption, putting significant pressure on mills to lower prices to incentivize movement.
Weakened Demand Ceiling: With the arrival of the traditional June off-season and persistent rainfall across Southern China, the expectation for a recovery in terminal procurement is extremely low.
Liquidity Pressure: Traders are holding high levels of social inventory at the end of the month. To manage cash flow and meet monthly settlement obligations, many merchants are shifting to "volume-for-liquidity" strategies, which inherently forces spot prices down.
The market is entering a "buyer’s window." With mills struggling to move inventory and traders facing month-end financial pressure, now is the time to negotiate.
Action Plan: If you have flexible procurement timelines, consider holding off on major commitments until the second week of June to gauge the full extent of the price correction.
Negotiation Tip: Given the significant increase in factory-level stockpiles, suppliers may be more receptive to volume-based discounts or more favorable credit terms to alleviate their warehousing pressure.
