Raw Material Prices Stabilize After Decline; Seamless Tube Prices May Remain Steady Today

[Price Review]

Seamless Tubes: On May 27, the price of 108*4.5mm seamless tubes in Linyi and Liaocheng markets remained stable. The Seamless Tube Price Index stood at 4,208.32 yuan, down 2.76 points from the previous period.

[Raw Materials]

Steel Billets for Tubes: On May 29, ex-factory prices for steel billets were steady. Hot-rolled steel billets (20#): Tiangang at 3,160 yuan/ton, Donghai at 3,140 yuan/ton. Continuous casting round billets (20#): Gangtou Special Steel at 3,200 yuan/ton.

Steel Billets: On May 30, the Tangshan Steel Billet Index was 2,943.0. The settlement price for Q235 square billets in Qian’an, Tangshan, was 2,910 yuan/ton. The weekly average price was 2,918.57 yuan/ton, and the monthly average was 2,937.67 yuan/ton. Traders’ spot prices were around 2,990 yuan/ton.

[Market Conditions]

Price trends show no changes in major cities nationwide, with the national average at 4,318 yuan/ton, a slight decrease of 2 yuan/ton from the previous period, reflecting weak demand. Recently, futures prices have fluctuated downward, and demand is expected to decline further due to holidays and construction halts for the national college entrance exams (Gaokao). Additionally, declining iron ore consumption by steel mills has weakened raw material prices, reducing cost support for steel products. Market prices remain soft, with some tube manufacturers forced to cut production or conduct maintenance. Traders are also reducing inventories, leading to a noticeable decline in social stockpiles, though pressure on tube manufacturers remains high. As the month-end approaches, some traders are lowering prices to boost sales. However, with raw material prices stabilizing or even strengthening slightly, market quotations have stopped falling. Overall, seamless tube prices are expected to remain steady today.

[Economic & Industry News]

◎ The General Office of the Communist Party of China Central Committee and the State Council issued the Opinions on Improving the Market-Based Allocation System for Resource and Environmental Elements. The document proposes that by 2027, carbon emission rights and water usage trading systems should be largely refined, pollutant discharge rights trading systems should be established, and markets for resource and environmental elements should become more active with improved pricing mechanisms.

◎ According to research, as of May 29, seven steel mills in Shandong have preliminarily confirmed their annual production plans, with adjusted crude steel output at 55.63 million tons, down by about 3.5 million tons year-on-year.

◎ This week, the supply of five major steel products reached 8.8085 million tons, up 84,100 tons (1%) week-on-week. Total inventories for these five products stood at 13.656 million tons, down 329,400 tons from the previous week. Social inventories decreased by 280,200 tons to 9.3254 million tons, while mill inventories fell by 49,200 tons to 4.3306 million tons.

◎ On May 29, transactions of iron ore at major ports totaled 1.087 million tons, down 8.3% from the previous day. Transactions of construction steel by 237 major traders reached 122,600 tons, up 30.9% day-on-day.

◎ This week, 31 out of 87 section steel production lines in Tangshan were operational, with an overall operating rate of 52.54%, down 6.78% from last week. The capacity utilization rate for section steel was 55.25%, down 3.59% week-on-week.