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Summary: This week, the average domestic seamless pipe price dropped by 14 yuan/ton, while raw material prices remained relatively stable. On the supply and demand front, supply-side pressure eased slightly this week, but the weak market demand structure has not fundamentally changed, keeping short-term seamless pipe prices under pressure. On the macro level, the upcoming new round of Sino-US economic and trade consultations, along with the Ministry of Finance's plan to issue U.S. dollar sovereign bonds, will be the focal points for the market next week.
1.1 Price Trends
Seamless Pipe Prices: According to Mysteel data, as of October 24, the average price of 108*4.5mm seamless pipe across 28 major cities nationwide was 4,261 yuan/ton, a week-on-week decrease of 14 yuan/ton.
Raw Materials: Billet prices in both Shandong and Jiangsu remained stable week-on-week, with overall minimal volatility.
Pipe Mill Price Adjustments: A survey of 34 sample seamless pipe mills by Mysteel indicated that most mainstream mills lowered their prices this week, with reductions ranging from 30 to 100 yuan/ton. Entering the third week after the holiday, mill order pressure noticeably increased, with a clear shortfall in contracts for large-diameter seamless pipes. Mills found it difficult to maintain firm prices and largely resorted to price cuts to secure orders.
1.2 Profit Analysis
Seamless pipe mill profits showed mixed performance this week. The profit for rolling mills using billet from Shandong was -80 yuan/ton, a week-on-week increase of 40 yuan/ton. The profit for rolling mills using billet from Jiangsu was 210 yuan/ton, a week-on-week decrease of 20 yuan/ton. The slight fall in Shandong billet prices led to a small repair in mill profits there. However, most domestic pipe mills continue to focus on offering discounts to facilitate shipments, leading to overall poor profitability, and are clearly constrained by costs in the short term.
1.3 East China Regional Commentary
Mainstream seamless pipe market prices in the East China region trended weaker. The price for 108*4.5mm seamless pipe was reported at 4,220 yuan/ton in Shanghai, 4,140 yuan/ton in Nanjing, and 4,180 yuan/ton in Hangzhou. The market trading atmosphere was weak this week. End-users purchased only as needed, and demand lacked momentum, resulting in sluggish sales for merchants. Traders' inventory saw a slight increase this week. It is expected that seamless pipe prices in the East China region will continue to trend weaker next week.
Social Inventory: According to the latest Mysteel survey of 123 seamless pipe merchants nationwide, social inventory for the sample enterprises was 685,500 tons, a week-on-week decrease of 1,600 tons. Inventory continued to be digested this week. Looking at the speed of destocking, the Southern market was clearly faster than the Northern market, where rapidly falling temperatures are leading to a noticeable contraction in demand. For next week, seamless pipe merchants are expected to actively push shipments, which may lead to a further decrease in market inventory.
Mill Inventory: A Mysteel survey of 33 seamless pipe manufacturers nationwide shows that mill inventory was 747,800 tons, a week-on-week decrease of 8,600 tons. Raw material inventory was 291,400 tons, a week-on-week decrease of 2,100 tons. Following maintenance at some pipe mills, the supply pressure on mill inventory has been mitigated. According to our survey, more mills are scheduled for maintenance next week, suggesting that mill inventory is likely to show a downward trend in the near term.
2.2 Production
Output: This week's output from sample pipe mills was 364,200 tons, a week-on-week decrease of 2,500 tons. Capacity utilization rate was 73.04%, down 0.5% week-on-week. Operating rate was 72.28%, up 1.98% week-on-week. According to incomplete statistics, two Northern pipe mills are scheduled for maintenance next week, and it is expected that the output and operating rate of mainstream pipe mills will decline next week.
2.3 Market Forecast
Market Overview: This week, the market has yet to see significant positive policies following the close of the 20th Central Committee's Fourth Plenary Session, and the futures market continues to show a narrow, volatile pattern. Current seamless pipe market supply and demand pressure persists. Influenced by expectations of off-peak season demand, traders are actively pushing shipments, and inventory replenishment remains generally cautious. On the supply side, mill output decreased this week, but overall order pressure has not been completely alleviated.
Outlook: Looking ahead to next week, merchants in Northern regions are expected to continue reducing inventory in anticipation of demand contraction due to colder weather, with the market still prioritizing active sales. Some pipe mills plan to schedule production line maintenance at the end of the month, which may help to alleviate mill inventory pressure.
In summary, the short-term fundamentals of the domestic seamless pipe market remain under pressure. It is expected that next week's prices will operate with a stable but weaker bias.
