As the market declines, large-diameter seamless steelMarket panic sentiment is spreading, with traders mostly on the sidelines. Steel mills are procuring cautiously, focusing on small, on-demand purchases. In Hebei and Shandong, Henan, and other regions, environmental protection production restrictions have been tightened short-term; domestic policy control risks are rising continuously, compounded by the growing port inventory. Therefore, under multiple pressures, iron ore prices have been heavily impacted. Later, steel production will still be limited by the Winter Olympics, suppressing certain iron ore demand. However, as the Winter Olympics end, iron production is expected to recover, boosting iron ore demand. Considering the major issue of closely monitoring rapid price increases in iron ore, it is anticipated that the iron ore market will see low-level volatility next week.
Recent significant price declines have led to a drop in refined powder prices in Hebei. In Shandong, due to increased出厂 prices by major mines like Jinling and Laiwu, steel mills have followed suit in purchasing prices, causing refined powder prices to rise. Data shows that this week, the average mining operation rate decreased year-on-year, primarily due to mines in Northeast, North China, and East China that have yet to resume operations post-Spring Festival holiday. This week, steel mills mainly focused on demand-based purchases, but some mills, with strong price-cutting intentions, resulted in relatively low overall transactions. Overall, most small-scale mining enterprises have not yet resumed production after the Spring Festival shutdown and will gradually restart production later. Meanwhile, environmental production restrictions in Hebei, Shandong, and Henan, among other regions, will keep some areas under control in the short term. Amidst steel mill production cuts and strict price control by regulators, large-diameter steel pipe manufacturers will adopt a cautious wait-and-see approach towards the future of refined powder. However, due to limited refined powder supply, the market is expected to remain tight, with prices predicted to remain weak in the coming week.
Supply and demand-wise, the estimated production volume increase is expected to reach in March; from a demand perspective, due to low production and inventory, apparent demand is higher; from a year-on-year consumption standpoint, there will be a gradual recovery process after the second and third weeks of February, but the pace will not be too fast. Regarding inventory, the cumulative inventory across the country remains relatively low, while social inventory accumulation is still higher than in previous years, but it is lower at factory warehouses, providing some support to the market. Looking ahead, factory and social inventories will diverge; with low production and orders placed, the potential for increase is limited; the total available resources are somewhat affected by logistics, mainly impacting the rhythm control; considering the rework issue, the inflection point for large-diameter steel pipe inventory may be early March.