SunSirs: Amid the Tug-of-War Between Cost and Demand, Seamless Tube Prices Fluctuated Narrowly with a Downward Bias

Price trend

According to data from SunSirs, seamless tube prices remained stable and flat for an extended period in June, showing a slight softening towards the end of the month. The quote for 20# seamless tube (108×4.5 mm) was 4,108 RMB/ton at the beginning of the month and fell to 4,098 RMB/ton by month-end—a decline of 0.24%—representing a year-on-year increase of 1.06%.

Market analysis

Regarding raw materials, the market for tube billets in June was characterized by "resilient cost support" alongside "weak, fluctuating prices." In the iron ore sector, the price of imported PB fines at Jingtang Port rose steadily, solidifying the cost floor for upstream materials. Meanwhile, the price of quasi-first-grade metallurgical coke in Tangshan held firm at 1,830 RMB/ton, with a ninth round of industry-wide price hikes brewing and expectations of further increases. This underlying strength in both key raw materials effectively limited the downside potential for seamless tube prices. However, tube billet prices themselves remained weak; the current cost of molten iron (excluding tax) across 114 steel mills stands at 2,379 RMB/ton, an increase of 17 RMB/ton year-on-year. Yet, the transmission of costs to final prices has been impeded—the price spread between seamless tubes and billets has narrowed from 670 RMB/ton during the same period last year to 550 RMB/ton, leading to a significant contraction in profit margins for major tube manufacturers. While the rigid cost floor has prevented a sharp drop in prices, the slight decline in billet prices continues to erode the strength of this cost-side support.

Regarding supply, the production of seamless tubes showed a downward trend for four consecutive weeks in June. In the first week of the month, output stood at 404,100 tonnes with a capacity utilization rate of 81.03%; by the end of the month (June 18-24), weekly output had fallen to 385,800 tonnes—a month-on-month decrease of 25,400 tonnes—while capacity utilization dropped to 77.36%, down 5.08% month-on-month. This passive contraction in supply helped alleviate supply-side pressure to some extent. However, mill inventories remained high and fluctuated; as of June 25, mill stocks stood at 788,200 tonnes, up 16,800 tonnes month-on-month. Meanwhile, social inventories of seamless tubes saw a ninth consecutive monthly increase, with stocks across 28 major sampled cities reaching 716,000 tonnes—an increase of 7,000 tonnes month-on-month.

Regarding demand: High temperatures and heavy rainfall in the south, combined with scorching heat in the north and the traditional off-season for construction, have led to an increase in work stoppages for municipal and civil engineering projects. End-user enterprises are generally adhering to an "as-needed" procurement strategy, and large-scale stockpiling has virtually disappeared.

Regarding exports: According to data from the General Administration of Customs, my country’s seamless tube exports totaled 469,900 tonnes in May 2026—a month-on-month decline of 5.43% and a significant year-on-year drop of 14.78%. Cumulative exports for the January-May period reached 2.4176 million tonnes, down 1.75% year-on-year; this shift marks a transition from the slight year-on-year growth seen in the January-April period to a decline. The impact of the off-season on overseas end-user demand is becoming increasingly apparent.

Market outlook

In summary, looking ahead to July, the seamless tube market is expected to remain in a bottoming-out phase. High temperatures and rainfall are unlikely to subside in the short term, meaning weak demand typical of the off-season will not see significant improvement. Following nine consecutive weeks of inventory accumulation, pressure to destock continues to mount, while support from raw material costs is weakening. However, a cost floor remains, and with profit margins already razor-thin, tube mills have little room for substantial price cuts. With clearly defined upper and lower price boundaries, a distinct upward or downward trend is unlikely in the near term. A market turning point is anticipated for mid-to-late July: persistent losses will force concentrated maintenance on tube billet rolling lines, leading to a marginal contraction in supply; meanwhile, the accelerated implementation of special-purpose bonds is expected to gradually unleash essential demand for urban tubeline networks, water conservancy, and energy infrastructure. Overall, seamless tube prices in July are projected to continue fluctuating within a narrow, weak range; mainstream quotes will likely remain stable with flexible price concessions for specific specifications, while overall trading activity is unlikely to see a significant rebound.

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