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Summary: Since the start of 2023, the seamless pipe market has not experienced the anticipated recovery. Instead, it has been stuck in a persistent "price-slump." Both finished products and raw material prices have been declining, with the price spread continuously shrinking. This has severely squeezed industry profits, even leading to long-term negative margins. The seamless pipe industry is currently facing a triple threat of weak demand, oversupply, and pessimistic outlook, with many companies caught in the predicament of "the more they produce, the more they lose." This report uses data and industry context to provide an in-depth analysis and outlook on this crisis.
Since 2023, the prices of seamless pipes and their raw materials have generally shown a volatile downward trend. At a high point in March 2023, the average price of seamless pipe (Φ108*4.5) reached 5,368 yuan/ton, and the average price of hot-rolled billet (20#, Φ50) was 4,423 yuan/ton, maintaining a price spread of around 945 yuan/ton, which was a reasonable range. According to Mysteel's statistics, as of September 5, 2025, the average price of seamless pipe has fallen to 4,318 yuan/ton, and the average price of billet is 3,429 yuan/ton, with the price spread at only 889 yuan/ton.
It is particularly noteworthy that around August 2024, the price spread briefly widened to 1,342 yuan/ton. However, this was a "false prosperity" caused by a drop in raw material prices. The absolute prices had already fallen below the psychological threshold for businesses, and the industry had already plunged into widespread losses. Entering 2025, the price spread has mostly stayed below 900 yuan/ton, far below the industry's average processing cost, making negative margins a constant.
Oversupply is not just a surface issue, but the core contradiction. Despite some companies actively adjusting production schedules and lowering operating rates, the overall production capacity remains stubbornly high. Data shows that while the national weekly seamless pipe output has decreased to 361,300 tons, it is still at a relatively high level. Although the capacity utilization rate has fallen to 72.46%, looking at long-term operational levels, the pressure from oversupply has not been fundamentally alleviated.
Demand continues to be weak, with real estate being a major drag. While infrastructure investment has somewhat supported demand and excavator production has seen a year-on-year increase, the continuous downturn in new real estate construction has made it difficult to boost actual consumption of seamless pipes. Seasonal factors like high temperatures and rainy seasons have further suppressed short-term demand. Traders are primarily focused on quick turnover and are unwilling to hold inventory, leaving the market without the momentum for a rebound.
Weak cost support and a failed price transmission mechanism. The simultaneous decline in raw material prices fails to provide effective cost support for finished steel products. In a downward cycle, finished products lag behind raw materials in price drops, leading to a passive widening of the price spread, but this signifies across-the-board losses. Once raw material prices stabilize, finished products lack the strength to follow suit, and negative margins become immediately apparent.
In the short term, without strong policy stimulus or large-scale production cuts, seamless pipe prices will remain under pressure, with low-level volatility as the main theme. The situation of negative margins will be difficult to reverse quickly, and companies will continue to face cash flow pressure.
In the long run, the industry's way out must rely on "supply-side structural reform" and product upgrades:
Eliminate outdated production capacity and promote mergers, acquisitions, or exits of small and medium-sized enterprises to alleviate supply pressure.
Drive a shift towards high-end products, developing high-value-added products like oil country tubular goods, nuclear power pipes, and high-pressure boiler tubes to avoid homogenized competition.
Promote green and intelligent transformations to reduce costs, increase efficiency, and enhance corporate competitiveness through technological means.Conclusion and Outlook
The seamless pipe industry is undergoing a profound shakeout. The continuous price decline and negative margins are not just short-term market phenomena but a reflection of long-term supply-demand imbalance and deep-seated structural contradictions. Companies must face reality, adopt "cash is king" and "cost control for efficiency" as their survival rules, while actively adjusting their product mix and seeking differentiated competitive paths. Only by doing so can they survive the industry's harsh winter and usher in a true turnaround.
