Mysteel Monthly: Seamless Pipe Prices Poised for Moderate Gains in August

Market Overview

July saw seamless pipe prices rebound from lows, though peak-season constraints capped gains. Macroeconomic stimulus drove a broad-based recovery in ferrous metals, lifting average prices by 92 RMB/t to 4,340 RMB/t (2.17% monthly gain). Despite supply contraction and inventory drawdowns, demand remained tepid with daily transactions at 13,804 tons (just +1.04% MoM). August's trajectory hinges on policy implementation and seasonal demand recovery, pointing to moderate upside.

Price & Profit Recovery

Price Rebound:

• July average: 4,340 RMB/ton (+92 RMB/t MoM)

• Raw material surge: Shandong billet jumped 150 RMB/t to 3,410 RMB/ton (+4.4%)

Profit Restoration:

• Shandong mills: 60 RMB/ton profit (110 RMB/t recovery from June losses)

• Regional divergence: Jiangsu mills outperformed at 240 RMB/ton profit

Supply & Inventory Discipline

Output Contraction:

• July production: 34.31k tons (-2.72k tons MoM)

• Capacity utilization: 74.57% (-5.9% MoM)

Inventory Shifts:

• Mill stocks: 661.7k tons (-55.3k tons MoM)

• Social inventories: 700.9k tons (resources shifting to traders)

Demand & Export Dynamics

Domestic Weakness:

• Transactions rose marginally (+1.04% MoM), constrained by summer heat

• Downstream resistance persisted above 4,350 RMB/t

Export Pressure:

• June exports: 471.7k tons (-14.45% MoM)

• Silver lining: Export prices rose to 8,602 RMB/ton (+0.79% MoM)

• Oil/gas pipes showed resilience (+20.22% Jan-May)

August Outlook: Policy Meets Seasonality

Growth Catalysts:

• Stimulus implementation: $140B special bonds for infrastructure

• Seasonal recovery: Cooling weather to boost construction from late-August

Key Risks:

• Cost volatility: Shandong billets already down 40 RMB/t weekly

• Policy-to-project lag (2-3 weeks)

Price Projection:

• Early August: 4,300-4,350 RMB/t (demand vacuum)

• Late August: 4,380-4,450 RMB/t (stimulus + seasonal boost)