Seamless steel pipe market outlook remains pessimistic in the second half of the year

The domestic seamless steel pipe market shows no sign of recovery; instead, conditions keep worsening.The industry is trapped in capital pressure and sluggish downstream demand.It is also weighed down by persistently high capacity and output, as well as slowing economic growth.

Short-lived price surges occasionally emerge, yet they fail to reverse the overall downward trend.The seamless steel pipe market is likely to stay weak for some time into 2026.

It is certain that demand lacks bright spots and driving forces, and investment confidence within the industry will keep declining.The general economic environment focusing on reform and restructuring cannot bring substantial positive changes to the seamless steel pipe sector.Furthermore, seamless steel pipe exports will face greater challenges in 2026.

Overall, the domestic seamless steel pipe industry will trend downward step by step in the second half of 2026, and market performance may be worse than the same period of 2026.Two major factors are analyzed as follows.

First, incomplete statistics show that the total domestic seamless steel pipe capacity reached 105 million tons.Seamless pipe capacity stood at around 40 million tons, and welded pipe capacity approximately 65 million tons.

In terms of capacity breakdown, ordinary carbon seamless pipes and petroleum seamless pipes each account for nearly 50%.Longitudinal submerged arc welded pipe capacity is 15 million tons, spiral submerged arc welded pipe 10 million tons, and high-frequency ERW pipe 40 million tons.

Regarding capacity utilization, total excess capacity of seamless steel pipes stood at roughly 30 million tons.Excess capacity for seamless pipes reached 15 million tons, and welded pipes another 15 million tons.By proportion, welded pipe overcapacity is slightly lower than seamless pipe.The capacity utilization rate of seamless pipes is about 62.5%, while welded pipes stand at roughly 72.72%.

Both figures are below the international benchmark of 75%~80% for healthy capacity utilization.

There were more than 2,760 domestic seamless steel pipe enterprises, including nearly 2,000 welded pipe manufacturers and almost 800 seamless pipe producers (including large traders).

Since North China implemented policies to eliminate backward capacity and promote steel mill restructuring, the number of pipe factories of all sizes has declined to varying degrees.Dozens of small private factories shut down due to bankruptcy and capital difficulties.

Although the pace of new factory construction slows and small mills close continuously, large pipe manufacturers in North and East China still maintain high production readiness.

Comprehensive data indicates total domestic seamless steel pipe capacity will reach 120 million tons.Seamless pipe capacity will be about 50 million tons and welded pipe around 62 million tons.Capacity utilization will drop sharply to nearly 60% for seamless pipes and roughly 68% for welded pipes.

Second, global mining companies hit record output levels.The high production growth trend will be difficult to curb.

Burgeoning iron ore inventories pushed ore prices down to a five-year low, close to a ten-year bottom.Market participants generally believe iron ore prices will struggle to rebound.

As a result, billets, strip steel and finished tubular products lose solid cost support.

In addition, environmental pressure in northern regions becomes increasingly severe, and traditional industries are gradually losing past prosperity.Investment scale and growth rate in steel, cement and seamless steel pipe industries will continue to decline.

Projects such as oil pipelines (China-Russia oil cooperation), water conservancy construction and urban pipeline renewal will generate partial demand.However, these sectors only account for 5%-10% of total consumption.They cannot fill the demand gap from real estate and machinery industries, which contribute 50%-60% of consumption.

Policy restrictions targeting high-pollution traditional industries are being rolled out rapidly.

Based on the above analysis, the seamless steel pipe market outlook remains pessimistic in the second half of 2026.

The government may launch economic stimulus policies to boost overall national economic recovery.Nevertheless, traditional industries are no longer the backbone of the national economy.The economic landscape has shifted amid rapid development of the service industry and internet sectors.

For traditional industries to achieve steady development, industrial chains and product structures must be restructured, alongside continuous innovation in business models.

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