Seamless steel pipe prices likely to open higher after Qingming Festival

With limited capital pressure and the phased release of downstream demand, seamless steel pipe prices maintained an upward trend in the week before the Qingming Festival.Prices dipped slightly in the middle of the week, yet the overall market remained on the rise.

Experts point out that low inventories provide support for further price gains.Seamless steel pipe prices are likely to open higher after the Qingming holiday.However, rising steel output will cap further upside room in the later stage.

During the final week of March, seamless steel pipe prices fluctuated upward.Prices climbed at the start of the week, slipped midway, and rebounded toward the weekend, posting an overall gain.Low inventory levels fueled sharp price hikes exceeding 100 yuan.Price movements in other regions were relatively moderate.

In March, domestic seamless steel pipe prices rose by 200 to 400 yuan in total.Imported iron ore saw remarkable increases, and steel billet prices repeatedly hit new highs.Profit margins for seamless pipe manufacturers widened to 200-300 yuan, reaching multi-year highs.Demand recovered gradually but remained weak, insufficient to sustain prolonged price rallies.

During the traditional "Golden March", seamless steel pipe prices fluctuated violently.Multiple upward attempts were curbed by sluggish trading, showing a pattern of short-lived surges followed by quick pullbacks.Average steel prices jumped 17% month-on-month, with a noticeably higher price floor.The monthly index of imported iron ore rose 12.6%, while Tangshan ordinary carbon billet increased by 19.6%.Raw material costs rose slightly faster than finished steel products, weighing on steel mill earnings.Fortunately, iron ore gains were relatively moderate, lifting overall profit margins for integrated steel producers.

Last Thursday and Friday, seamless steel pipe prices edged up again on phased demand recovery.Steel futures, which had fallen sharply earlier, staged a strong rebound, lifting market sentiment.Current inventories of various steel products across regions stay low.Supported by persistently high raw material costs, seamless steel pipes may open higher after the Qingming Festival break.

Compared with last year’s bottom prices, steel product prices have risen by 600-800 yuan.Fears over high price levels keep growing.Coupled with continuously expanding steel output, the market needs to guard against potential price corrections.

To sum up:Rising temperatures, climbing pipe prices and emerging profits are accelerating production resumption at steel mills, especially those in northern China.Conservative estimates show national daily crude steel output will recover to 2.15 million tons in March, possibly surpassing 2.20 million tons.Daily output may climb even higher in April.

In addition, the domestic seamless steel pipe rally weakened export diversion for steel manufacturers, which will build up supply pressure and pose risks to future prices.Furthermore, traders are enjoying decent profits and may cut prices to clear stocks later, dragging down market performance.

Overall, seamless steel pipe prices still have room to move up slightly, but upside potential is limited.

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