Mysteel Monthly Report: National Seamless Pipe Prices Likely to Fluctuate with Downward Bias in June

Overview: May marked the transition from peak season to off-season. Post-holiday demand briefly increased after May Day but weakened significantly in mid-to-late May as market activity declined. Mills maintained high-then-low production with inventories rebounding from low levels yet remaining relatively low. Raw materials and profitability underperformed expectations, showing minor declines. Traders remain cautious about June market conditions. Below is a summary of May's fundamentals and June price forecast.

I. Price & Profitability Analysis

(1) Moderate Price Decline in May: As of May 30, the national average seamless pipe price (20#, 108×4.5mm) stood at RMB 4,314/ton, down RMB 18/ton (0.53%) from April 30's RMB 4,332/ton. Demand was relatively strong early May but weakened to off-season levels mid-to-late month. Macroeconomic factors and poor performance in the broader steel sector contributed to this slight downward fluctuation.

(2) Declining Mill Profits: Steel prices weakened throughout May, reducing mill profitability. Billet procurement enthusiasm declined, pushing billet prices lower. As of May 30, Shandong mills averaged RMB -50/ton profit for 20# hot-rolled Ф108×4.5mm seamless pipes – a RMB 60/ton decrease from April’s RMB 10/ton profit.

• Shandong billet price: RMB 3,240/ton on May 3 (↓RMB 70/ton MoM, -2.16%)

• Billet inventories showed low-then-high pressure monthly

• Continuous casting billet fundamentals outperformed rolled billet

• Sample mills’ billet reserves increased slightly MoM

II. Supply Analysis

Significant Production Reduction: Mills maintained normal operations in May but adjusted output to demand fluctuations. Production peaked early then declined, while mill inventories rose steadily from low levels. Latest data from 32 producers (122 production lines):

• Weekly output: 363,300 tons (↑3,700 tons YoY)

• Capacity utilization: 78.94% (↑0.8% YoY)

• Operating rate: 60% (↑0.91% YoY)

• Mill inventories: 657,100 tons (↑53,600 tons YoY)

• Raw material inventories: 305,700 tons (↑8,300 tons YoY)

III. Demand Analysis

Moderate Demand Contraction: Approaching off-season coupled with domestic/international macroeconomic factors caused demand to peak early then decline. According to 124 trading firms:

• Average daily May transaction volume: 15,212 tons

• MoM change: ↓2.42% vs. April

• YoY change: ↓1.42% vs. May 2024

IV. Import-Export Analysis

April Export Decline: Customs data shows April 2025 exports:

• Exports: 494,100 tons (↓10.02% MoM; ↓2.02% YoY)

• Jan-Apr cumulative exports: 1,909,200 tons (↑10.05% YoY)

• Imports: 7,000 tons (↓18.60% MoM; ↓39.66% YoY)

• Jan-Apr cumulative imports: 30,900 tons (↓23.33% YoY)

• Net exports: 487,100 tons (↓9.88% MoM; ↓1.14% YoY)

• Jan-Apr net exports: 1,391,200 tons (↑15.76% YoY)

Note: Trade protectionism and weakening global demand caused the MoM/YoY export decline, though Jan-Apr performance remains strong.

V. June Market Outlook

May Recap:

1. Prices and profits trended downward

2. Production peaked then fell; mill inventories remained low

3. Domestic/export demand declined MoM

June Forecast:

• Macro: Fewer policy releases amid mid-year transition + global instability → bearish pressure

• Supply: Most mills maintain high output with low inventories, but slowing consumption will inevitably increase stockpiles → intensified competition

• Demand: Southern China faces high temperatures/rainy season → typical off-season demand slump expected

Conclusion: Against weak macro/fundamental backdrop, June seamless pipe prices likely to fluctuate with downward bias.