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This week, domestic seamless pipe prices experienced a slight increase, with the average price rising by 2 yuan/ton week-on-week. Raw material prices remained stable to strong, providing obvious support on the cost side in the short term. Consequently, finished product prices shifted slightly upward, with some merchants raising quotes in response. On the macro level, as of December 4, CME "Fed Watch" data indicates an 89% probability of a 25 basis point interest rate cut by the Federal Reserve in December. In the market, the characteristics of the off-peak season are significant; transaction volumes in the Northern region have contracted noticeably, and traders are primarily focused on digesting existing inventory. Overall, order intake at mainstream pipe mills is average. Under the combined effect of cost support and weak demand, seamless pipe prices are expected to run steadily in the short term.
Price Dynamics
According to Mysteel data, as of December 5, the average price of 108*4.5mm seamless pipes in 28 major cities nationwide was 4,233 yuan/ton, a week-on-week increase of 2 yuan/ton.
Raw Material Situation
This week, Shandong pipe billet prices rose by 20 yuan/ton, while Jiangsu pipe billet prices saw a significant week-on-week increase of 70 yuan/ton. This strength in raw materials is bolstering the finished steel market.
Mill Price Adjustments
According to a Mysteel survey of 34 sample seamless pipe mills, a few mainstream mills raised their ex-factory prices this week, with adjustments ranging from 30 to 100 yuan/ton.
Profit Performance
Profit performance for tolling seamless pipe mills was mixed this week.
Shandong tolling mills reported a profit of -60 yuan/ton, a week-on-week increase of 20 yuan/ton.
Jiangsu tolling mills reported a profit of 210 yuan/ton, a week-on-week decrease of 10 yuan/ton.
East China Regional Analysis
Prices for hot-rolled pipe billets in Shandong trended stronger this week. Mainstream seamless pipe ex-factory prices in Shandong rose slightly, mill output increased, and in-plant inventory continued to decline. Seamless pipe prices in East China rose slightly; except for Nanjing where prices remained unchanged, other cities saw varying degrees of increases. Traders mostly maintained restocking based on rigid demand. As transactions in the off-peak season fell short of expectations, manufacturers mostly focused on profit-conceding shipments, leading to a continued slight decrease in social inventory. It is expected that East China seamless pipe prices will consolidate next week.
Inventory Outlook
According to the latest Mysteel survey of 123 seamless pipe merchants nationwide, sample enterprise social inventory was 672,600 tons, a week-on-week decrease of 5,800 tons.
Entering the deep winter off-peak season, Northern merchants are focusing on active destocking with low willingness to replenish.
Southern regions are experiencing spot shortages in some areas. With active shipments by traders, market inventory is expected to decline further next week.
According to the Mysteel survey of 33 seamless pipe production enterprises nationwide, in-plant inventory was 753,700 tons, a week-on-week decrease of 3,400 tons; raw material inventory was 307,200 tons, a week-on-week decrease of 7,100 tons. Mill profits increased slightly this week. Merchants in the Southern region are unaffected by the climate, shipping normally, with some specifications even seeing shortages.
Production Outlook
In terms of output, sample pipe mill production this week was 388,000 tons, a week-on-week increase of 1,600 tons. The capacity utilization rate was 77.81%, up 0.32% week-on-week. The operating rate remained flat week-on-week but increased by 6.93% month-on-month.
Market Prediction
This week, the ferrous futures market presented a volatile strengthening trend, and steel prices fluctuated accordingly, with seamless pipe prices showing low-level consolidation.
Upstream: Mainstream pipe mill profits continue to be squeezed by high costs, and performance remains poor. Maintenance at some mills is increasing, leading to a drop in factory inventory and an expectation of supply contraction.
Demand: As temperatures drop further, downstream demand in the North appears even weaker, characterized mainly by sporadic shipments.
Sentiment: Traders and end-users generally hold a cautious wait-and-see attitude toward the future market, and overall transactions are light.
In a landscape of weak supply and weak demand, it is expected that national seamless pipe prices will likely maintain stable operation next week.
