Mysteel Weekly: Raw Material Dip Points to Mild Price Softness for Seamless Pipes

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Market Overview

Mixed price movements emerged this week as northern markets declined while most regions held steady. Selected northern mills trimmed offers by 30-50 RMB/ton amid softening billet costs. Production dipped 0.76k tons weekly, though demand remained tepid. With output cuts failing to meet expectations and consumption staying subdued, some markets resorted to hidden price reductions. The confluence of weak raw materials and stagnant demand points to stable-to-soft pricing in the coming week.

Key Market Dynamics

1. Price & Cost Adjustments

National Average: 4,359 RMB/ton (↑7 RMB/t WoW), masking regional divergence
Raw Material Easing: Shandong billets: ↓50 RMB/t WoW; Jiangsu billets: ↓20 RMB/t WoW
Mill Pricing Strategies: Northern mills: Selective cuts (30-50 RMB/t); Majority: Held offers stable amid cost uncertainty

2. Profit Divergence Intensifies

Shandong: -20 RMB/t (↑40 RMB/t WoW) – partial recovery from deep losses
Jiangsu: 210 RMB/t (↑10 RMB/t WoW) – sustained regional advantage
Structural Issue: Cost disparities drive widening regional profit gaps

3. Inventory Rebalancing

Social Stocks: 689.8k tons (↓6.6k tons WoW) – traders destock cautiously
Mill Stocks: 697.2k tons (↑18k tons WoW) – inventory shifting to producers
Pressure Point: Mill inventories up 14.8k tons MoM despite output cuts

4. Supply Moderation

Output: 358k tons (↓7.6k tons WoW) – minor correction
Operational Rates: Capacity utilization: 77.79% (↓1.65% WoW);Operating rate: 59.09% (↓0.91% WoW)
Underwhelming Cutbacks: Production remains 26.6k tons above 2024 levels

Regional Spotlight: East China

Billet costs dipped 10-30 RMB/t, but mills raised offers marginally
Social inventories rose on environmental production curbs anticipation
Terminal demand muted – transactions dominated by essential purchases
Outlook: Modest upward pressure despite broader softness

Next Week Outlook

Price Trajectory: Stable with soft bias (4,340–4,360 RMB/t range)
Support Factors: Cost Floor: Billet prices nearing bottoming zone; Inventory Control: Traders maintaining lean stocks
Downside Risks: Northern mill price cuts may spread southward;Demand fails to respond to traditional seasonal triggers
Key Watchpoint: Jiangsu profit resilience vs Shandong distress