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This week, the average domestic seamless pipe price decreased by 5 yuan/ton, while raw material prices underwent weak adjustment, with national billet prices generally falling by 30-50 yuan/ton week-on-week. The market, having entered November, distinctly exhibits off-peak season characteristics, with weakening transactions. Mill order intake remains ordinary, and in-house inventory sits at a high level compared to the previous year, resulting in significant shipment pressure. Given the current macroeconomic policy vacuum, seamless pipe prices are likely to maintain their weakness and be difficult to reverse in the short term.
Seamless Pipe Prices Continued to Drift Lower
According to Mysteel data, as of November 14, the average price of 108*4.5mm seamless pipe across 28 major cities nationwide was 4,239 yuan/ton, marking a week-on-week decrease of 5 yuan/ton.
Raw Material Costs Showed Mixed Trends
This week, billet prices diverged: Shandong billet prices fell by 20 yuan/ton week-on-week, while Jiangsu billet prices increased by 10 yuan/ton week-on-week.
A survey of 34 sample seamless pipe mills indicated that most mainstream mill ex-factory prices remained stable this week, with individual mills reducing prices by 30-40 yuan/ton.
Profit Margins Narrowed Slightly
Seamless pipe mill profits saw a small decrease this week. The profit for rolling mills using billet from Shandong was -10 yuan/ton, a week-on-week decrease of 30 yuan/ton. The profit for rolling mills using billet from Jiangsu remained flat at 270 yuan/ton.
With billet prices fluctuating unevenly across the North and South, and mill ex-factory prices mostly holding steady, profitability remained under pressure.
East China Regional Commentary
While Shandong hot-rolled billet prices slightly decreased and Jiangsu billet prices saw a 10 yuan/ton increase, ex-factory prices for some Shandong pipe mills were adjusted down by 30-40 yuan/ton, keeping the overall East China seamless pipe market prices largely stable.
Shanghai seamless pipe price was reported at 4,200 yuan/ton, Nanjing at 4,120 yuan/ton, and Hangzhou at 4,190 yuan/ton.
This week saw a small increase in sample mill output and inventory accumulation in mill warehouses, though social inventory slightly decreased. Approaching the year-end, downstream purchasing remains focused on essential needs, and market transactions have not improved. Consequently, merchants prioritize sales and inventory reduction, with some resorting to unofficial price cuts.
Overall, East China seamless pipe prices are expected to show volatile consolidation next week.
Mill Inventory High, Social Inventory Saw Minor Decrease
According to Mysteel's latest survey of 123 seamless pipe merchants nationwide, social inventory for the sample enterprises was 682,800 tons, a week-on-week decrease of 2,100 tons. Slow transactions during the off-peak season and weakened trader purchasing enthusiasm led to a minimal decrease in social inventory this week.
Currently, merchant inventory is slightly lower than last year's level, and traders are strategically focused on accelerating inventory turnover.
A survey of 33 sample seamless pipe manufacturers nationwide showed that mill in-house inventory was 781,700 tons, a week-on-week increase of 1,700 tons. Raw material inventory increased by 7,900 tons week-on-week to 293,100 tons.
Due to ordinary shipment conditions, mill inventory accumulated this week, remaining at a high level compared to the previous year, indicating significant shipment pressure on pipe mills.
Production Continued to Increase
Weekly output from sample pipe mills was 392,500 tons, a week-on-week increase of 8,500 tons. Capacity utilization rate rose by 1.7% to 78.72%, and the operating rate increased by 2.97% to 74.26%.
Mill production has returned to a normal, increasing state this week.
Market Prediction: Weak Volatility to Persist
Black commodity futures showed volatile movement but lacked upward momentum this week. Raw material prices showed regional divergence.
With mainstream mill production normalizing, this week saw increases in both output and inventory. High mill in-house inventory results in significant shipment pressure, and mill ex-factory prices are likely to be adjusted downward next week.
From a market demand perspective, the off-peak season effect leads to a prevalent bearish or wait-and-see attitude among traders and end-users. The "buy on the rise, not on the dip" mentality contributes to weak market transactions, making it difficult to form an effective positive feedback loop.
Mill ex-factory prices are expected to see a small adjustment downwards next week, and market prices are forecast to continue a narrow volatile pattern.
