1. Price Trends
According to the statistics of SunSirs, the seamless tube in 2019 shows a M-shaped trend, by the end of the year, the quotation of the 20# seamless tube is $636.34/ton, down 0.09% compared with the beginning of the year, the highest price is $689.30/ton on March 8, the lowest point is $633.48/ton on June 20, the annual amplitude is 8.4%.
2. Market Analysis
Looking at the trend of seamless tube throughout the year, there are two waves rising, respectively in the middle of January to March and the end of June to the beginning of August:
The first wave of increase (from January to the middle of March) was caused by the opening of steel trade after the Spring Festival. According to the communication with traders around the country, most of the businesses raised prices after opening. In addition to the raw material tube billet overall rise, seamless tube also follow the rise.
The second wave of increase (from late June to early August) was mainly affected by environmental restrictions. Because the air quality improvement of environmental supervision work is increasingly strict, Shandong, Hebei Tangshan production restrictions, up to the manufacturers of the production restrictions, down to the steel market relocation and vehicle control and other work, the domestic seamless tube market supply has a greater impact. Part of the market specification is in short supply, the replenishment speed is slowing down, and seamless prices rise.
Although the price of seamless tube is rising due to the recovery of the demand for starting construction after the holiday and the increase in the price of environmental protection raw materials, overall, the excessive release of capacity of seamless tube leads to excess capacity. According to the survey data, the output of seamless tube in 2018 is about 28 million tons, and the new production capacity in 2018 is expected to reach nearly 3 million tons. As planned, nearly 4 mt of new capacity is expected in 2019. However, due to the deterioration of market competition, many new production line projects have been shelved and the actual data need to be discounted. In 2019, the new production capacity is mainly four units in Luli, so it is estimated that the new production capacity of seamless steel tube in the first half of 2019 is expected to be 2-2.5 million tons. The fundamental situation of seamless tube overcapacity is still significant, and the overcapacity is concentrated in the general pipe (20# material) market.
3. After-Market Prediction：
SunSirs seamless tube analysts believe that looking forward to 2020, the pressure of overcapacity in seamless steel tube is difficult to alleviate, the overall peak season will present a small upward, off-season pressure down shock downward trend, the price in the $629.76-701.32 /ton range.
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