Mixed price moves on positive factors, seamless steel pipe prices may trend down with fluctuations in the mid-to-late stage

Fewer working days last week together with the Dragon Boat Festival holiday laid the foundation for the rebound in seamless steel pipe prices.On the supportive side, steel billet prices showed upward momentum in early June, coupled with a recovery in steel futures, driving the rebound of seamless steel pipe prices.

Partial market demand was released ahead of the holiday, accumulating momentum for price gains.Steel billets and steel futures fluctuated and rebounded this week.Although lacking sustained upward momentum, they still brought a short-term recovery to seamless steel pipe prices.

The growth of industrial producer prices exceeded expectations.The PPI index rose month-on-month for three consecutive months, while the year-on-year decline continued to narrow for five straight months, indicating a short-term economic recovery.

This is mainly driven by recent policy stimulus, and initial results have been seen in supply-side reforms.Nevertheless, overall demand is weaker than anticipated, and substantial progress in capacity reduction has not yet been achieved.The economy remains in a state of oversupply.

In addition, this set of data diverges from high-frequency indicators.Steel billet and iron ore prices have already fallen, and the month-on-month PPI increase in June may further narrow.

Growth in money supply is constrained.The central bank only maintains relatively stable liquidity through various monetary tools.Given stabilized economic growth, incremental loose policies are limited and mainly serve as hedging measures.Room for monetary easing may reopen in the mid-to-late third quarter.

Tangshan will remain under production restrictions next week, boosting market sentiment for seamless steel pipes.However, whether the upward trend can be sustained depends on matching downstream demand.

Steel mills still retain certain cash flow profits, so their willingness to take the initiative to cut output remains weak.Inventory pressure is moderate, yet seasonal demand weakening and pessimistic demand forecasts will further widen the supply-demand imbalance.

In terms of output, the latest data shows that in late May 2026, the average daily crude steel output of member steel enterprises reached 1.7777 million tons, up 1.83% from the previous ten-day period.The China Iron and Steel Association estimated national average daily crude steel output at 2.333 million tons in May, rising 0.82% month-on-month.

By the end of late May, steel inventories of member steel enterprises stood at 13.9634 million tons, down 0.6% from the previous ten-day period but up 13.1% year-on-year.

Rising steel output and growing inventories in late May reflect rapid capacity release by steel mills.Yet the slower month-on-month inventory growth signals decent product shipments.

Entering June, affected by shrinking profits and the traditional off-season, more steel mills have launched production suspension and maintenance, which helps ease output and inventory pressure.Due to data lag, statistics for early June may still edge higher.

From a macro perspective, the National Bureau of Statistics released May economic indicators.In May, the CPI rose 2.0% year-on-year and fell 0.5% month-on-month.The PPI dropped 2.8% year-on-year but increased 0.5% month-on-month.

Breakdown PPI data shows that among industrial producer purchasing prices, fuel and power prices decreased 8.3% year-on-year, non-ferrous metal materials and wires fell 7.0%, ferrous metal materials and chemical raw materials both declined 4.1%, and building materials & non-metallic mineral products dropped 3.9%.

Among industrial producer ex-factory prices, production materials prices fell 3.7% year-on-year, dragging down the overall PPI by around 2.7 percentage points.Extractive industry prices declined 9.6%, raw material industry prices fell 7.2%, and processing industry prices dropped 1.8%.

In the futures market, US non-farm payroll data came in far below expectations this week, lowering the probability of Federal Reserve interest rate hikes.The US Dollar Index slipped internationally, lifting commodity prices and triggering a strong rebound in ferrous metal futures.

However, high uncertainty surrounding the US dollar means steel futures cannot sustain strength, with risks of fluctuating downward in the later period.

Tangshan will continue implementing production restrictions (00:00 June 8 to 24:00 June 19, 2026).All rolling and forging enterprises using coal-fired kilns in Fengrun District must suspend production.All sintering machines at local steel enterprises will halt operation, and blast furnaces will run under low-load maintenance under safe production conditions.All open-pit mines are required to stop operations.

The policy supports market confidence sentiment, but sustained price gains rely on downstream demand cooperation.

Overall, supply pressure in the seamless steel pipe market continues to mount.Continuous price declines have greatly squeezed profit margins, and some steel mills have fallen into losses and begun cutting output.Even so, existing cash profits curb active production cuts.

Inventory pressure stays moderate, but seasonal demand weakness and worsening demand expectations will further aggravate supply-demand conflicts.Short-term prices have neared the break-even line, offering support to seamless steel pipes, leaving limited room for sharp further declines.

It is estimated that diverging market views will lead to mixed price movements supported by positive factors early next week.Nevertheless, seamless steel pipe prices may fluctuate lower in the mid-to-late period.

Tags: Mixed price moves on positive factors, seamless steel pipe prices may trend down with fluctuations in the mid-to-late stage