2022 H1 saw an unprecedented steel market surge, driven by global monetary easing and domestic factors like "carbon neutrality" and "carbon peak." Steel prices embarked on a significant upward trend. Seamless pipe prices overall surged sharply in the first half, peaking in early May, with a year-on-year increase of nearly 40% by the end of June. This year's supply and demand for seamless pipes were released earlier than in 2020, with both supply and demand showing similar trends in the first half. Looking ahead to the second half, it's expected that both supply and demand will experience short-term fluctuations at low levels before gradually recovering, and seamless pipe prices in the second half are still worth looking forward to. 1. H1 2022 Seamless Pipe Market Review (1) H1 Price Trend Review The seamless pipe price trend in the first half generally showed a fluctuating upward trend, with significant gains. In May, seamless pipe prices experienced a sharp rise and fall in the shape of an inverted "V." By June, seamless pipe prices (20#, 108*4.5mm, unless otherwise specified) had returned to a reasonable range. According to Mysteel, the average domestic seamless pipe price reached 6149 yuan/ton as of June 30, up 980 yuan/ton from 5286 yuan/ton on January 1, an increase of 1672 yuan/ton year-on-year, with a growth rate of 37.3%. The price peak for seamless pipes in the first half occurred in early May, with an average price of 7012 yuan/ton. From the perspective of historical seamless pipe prices, unlike other more robust steel varieties, seamless pipe prices showed relatively weak performance, with the price peak in 2021 still significantly below that of 2008. (2) H1 Fundamental Situation Review Supply Review Due to effective control of the domestic COVID-19 situation at the beginning of the year and a strong economic recovery, domestic demand quickly rebounded. On the other hand, seamless pipe supply decreased early last year, and pipe mills had low inventory at the beginning of the year. The mismatch between supply and demand at different stages prompted rapid resumption of seamless pipe factories after the Spring Festival. In the first week after the Spring Festival, the capacity utilization rate and production of pipe mills had already reached a high level for this year. Subsequently, as mill profits declined, the mismatch between supply and demand improved, and mill supply began to fluctuate and contract. By the middle of May, due to falling prices, mill orders plummeted, mill inventory pressure soared, and mill supply fell sharply. Mines and selected enterprises in Shandong, Shanxi, and Hebei all suspended production, with limited domestic mineral resource market supply. Added to this was the fact that the overall domestic iron ore market price was already low, significantly supported by cost factors, so it was unlikely that Liaocheng seamless thick-walled square pipe factories would continue to lower prices. The market in the North China region was stable with a slight upward trend, and the Tangshan market was driven by the rise in import ore prices, with some manufacturers raising iron ore prices, but most steel companies maintained low-volume purchases, only a few mills with tight inventory slightly raised iron ore purchase prices, with limited impact on the overall market. The market in the Northeast region was slightly active, with traders' enthusiasm for seeking goods increasing, mainly influenced by the rise in external markets. However, most steel companies had good iron ore inventory conditions and were not strongly inclined to raise prices for purchases, so the upward trend in the local market was halted. The market in the East China region saw a slight upward trend. With frequent low-price resources emerging in the Liaocheng seamless thick-walled square pipe factory market and the market still holding a pessimistic attitude, it is expected that the mainstream trend today will continue to decline and adjust. The rapid decline in steel prices for Liaocheng seamless thick-walled square pipe factories accelerated, and the adjustment intensity in the Liaocheng seamless thick-walled square pipe factory market was significantly greater than yesterday. With the continuous decline in futures prices and weak spot transactions, as well as further intensification of market pessimism, domestic steel prices have successively broken previous lows and hit new lows. Intermediary operators' enthusiasm has weakened, and downstream buyers are only purchasing as needed, with overall trading activity reaching a low point. The price of billets at 2100 yuan is not the end of this adjustment, and the continued downward adjustment operations of finished products like rebars, high lines, hot-rolled coils, medium and thick plates, and cold-rolled sheets will continue, with no bottom in sight. It is still recommended to operate the market cautiously. The predicted downward adjustment for medium and thick plate manufacturers has reached 2350 yuan, and hot-rolled coil has reached 2650 yuan. This bearish sentiment will further expand the space for continued decline in steel prices.