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Overview:This week, domestic seamless pipe prices declined slightly, with the average price dropping by 9 yuan/ton week-on-week. On the macro front, the offshore RMB strengthened past the "7" integer mark against the US dollar during the week. Looking ahead, China plans to continue implementing more active fiscal policies and moderately loose monetary policies in 2026. In the market, futures trended upward with volatility, while raw material prices showed mixed performance; however, cost support for pipe mills remains intact. Under the influence of the seasonal off-peak period, market demand is gradually shrinking. Trader procurement fell short of expectations, with a focus primarily on shipments. Given the strong wait-and-see sentiment, seamless pipe prices are expected to run stable-to-weak next week.
Price Aspect:
Seamless Pipe: According to Mysteel data, as of December 26, the average price of 108*4.5mm seamless pipes in 28 major cities was 4,219 yuan/ton, down 9 yuan/ton week-on-week.
Raw Materials: Shandong billet prices fell by 10 yuan/ton, while Jiangsu billet prices rose by 20 yuan/ton.
Mill Adjustments: A survey of 34 sample mills showed mainstream ex-factory prices remained largely stable, with individual mills lowering prices by 50 yuan/ton.
Profit Aspect:
Profits for billet-rolling mills diverged significantly. Shandong mills saw profits drop to -120 yuan/ton (down 50 yuan/ton), while Jiangsu mills saw profits drop to 100 yuan/ton (down 70 yuan/ton).
East China Regional Review:
Billet prices diverged between North and South (Shandong down, Jiangsu up). Mainstream mill quotes remained stable, keeping East China seamless pipe prices mostly steady.
National production dropped for the third consecutive week, and in-plant inventory continued to decline.
The East China market is trending stable-to-weak. Off-season transactions are poor, project operating rates are insufficient, and traders are restocking only as needed. Social inventory continued a slight decrease. Prices are expected to consolidate next week.
Inventory:
Social Inventory: Surveying 123 merchants, social inventory was 665,600 tons, down 6,000 tons week-on-week. With weak market sentiment and poor demand, existing stocks are sufficient, leading to low restocking enthusiasm. Inventory is likely to drop further.
Mill Inventory: Surveying 33 production enterprises, in-plant inventory was 700,400 tons (down 20,000 tons), and raw material inventory was 276,200 tons (down 24,700 tons). Despite environmental restrictions ending, production continued to fall as mills actively pushed shipments to reduce inventory pressure amidst falling profits.
Production:
Weekly output was 352,900 tons (down 23,600 tons); capacity utilization was 70.77% (down 4.73%); operating rate was 77.23% (up 4.95% as maintenance ended).
Market Prediction:
Futures remain strong, but raw material support is mixed. Cost support has weakened compared to last week.
Upstream: Mills are cautious about passing cost pressure downstream. With maintenance ending and operating rates rising, there is a possibility of "hidden" price cuts to promote sales.
Demand: Although Chinese New Year is still a month away, the market has entered winter mode early. The off-season effect is prominent. Most market inventories are sufficient, and procurement willingness from terminals and traders is low.
Conclusion: Lacking core momentum for a price rise, national seamless pipe prices are expected to trend stable-to-weak next week.
