Price trend

According to SunSirs’ data, seamless tube prices fluctuated within a narrow range in September. At the beginning of the month, the price of 20#, 108*4.5 seamless tube was 4,095 RMB/ton, rising to 4,100 RMB/ton at the end of the month, up 0.12% and down 1.03% year-on-year.

Analysis review

Regarding raw materials: Prices for billets, the direct raw material for seamless tubes, weakened in September. Since the second quarter, molten iron costs for steel mills have continued to rise. Furthermore, with expectations of rising coke prices, the price of raw coking coal remained high. This suggests that while billet prices may be under pressure in the short term, their potential for significant decline is limited, providing a floor support for seamless tube prices.

Supply: Supply was under pressure. Weekly tube mill output remained relatively high at 385,700 tons, while both in-plant and nationwide inventories were increasing. A turnaround may occur after the holiday. Some tube mills planned maintenance around the National Day holiday.

On the demand side, the traditional "Golden September" peak season did not see the expected strong rebound in demand. In the northern market, with the heating season approaching, downstream construction sites were rushing to complete projects, resulting in relatively stable and even improving transactions. In the southern market, the impact of Typhoon Boroi on the market forced the closure of markets in Guangdong and other areas, resulting in stagnant shipments and a slowdown in transactions.

Exports were a highlight of the market in September, with seamless tube exports reaching 563,400 tons in August, a significant increase of 21.90% month-on-month.

Market outlook

In summary, there's room for further improvement in supply and demand fundamentals after the holiday. On the one hand, maintenance at some tube mills will lead to a decline in high supply; on the other hand, demand is expected to continue to recover after the holiday. With strong cost support, prices may rise once supply and demand reach a new equilibrium. However, the market's destocking rate is slower than expected, and the oversupply problem persists. The seamless tube market is likely to continue to fluctuate within a narrow range.

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