Mysteel Weekly: Seamless Pipe Prices to Hold Firm Amid Inventory Dip

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Market Overview

Seamless pipe prices stabilized nationally this week, with select mills raising offers by 10-50 RMB/ton despite tepid demand. Production rebounded as mills resumed operations, lifting output by 1.5k tons weekly. Social inventories fell 0.44k tons, easing pressure, while mill stocks rose 0.86k tons as trader restocking slowed. Cost support remained firm with Shandong billets up 10 RMB/ton, though regional profit divergence intensified—Jiangsu mills gained 20 RMB/ton in profits, while Shandong mills saw a 20 RMB/ton drop. With weak seasonal demand and cautious trader sentiment, prices are expected to hold steady with a slight upward bias.

Key Market Dynamics

1. Price & Cost Analysis

National Average: 4,339 RMB/ton (↓1 RMB/t WoW), reflecting broad stability.
Raw Materials: Shandong billets ↑10 RMB/t;
Profit Divergence: Shandong: 40 RMB/t profit (↓20 RMB/t WoW); blast furnace mills averaged 153 RMB/t profit (↓33 RMB/t).

2. Inventory Shifts

Social Stocks: 696.5k tons (↓0.44k tons WoW), indicating gradual destocking.
Mill Stocks: 670.3k tons (↑0.86k tons WoW) as traders delayed restocking.
Pressure Points: Higher-priced resources entering markets increased trader carrying costs, though overall inventory stress eased.

3. Supply Rebound

Output: 358.1k tons (↑15k tons WoW), driven by resumed mill operations.
Capacity Utilization: 77.81% (↑3.25% WoW), signaling increased production.
Risk: Rising mill inventories may prompt discount policies if demand weakens further.

4. Regional Demand Variations

East China: Prices flat; transactions muted. Traders reduced inventories cautiously.
South China: Typhoons disrupted construction, limiting demand despite a 30 RMB/t price hike.
North China: Prices softened (e.g., Tianjin: 4,210 RMB/t) due to oversupply and buyer resistance.
Central/West: Traders held prices steady but faced high inventory pressure.

Next Week Outlook

Price Trajectory: High-level consolidation expected (4,330–4,360 RMB/t range).
Support Factors:Cost Floor: Billet prices underpinning finished pipe values.
Trader Sentiment: Rising delivery costs bolstering price support.
Risks:Weak Demand: Persistent summer lull in construction.
Supply Glut: Mill output rebound may outpace consumption.
Catalyst Watch: Mid-late August policy stimulus (e.g., infrastructure bonds) could revive demand.