This week, the retail prices of thick-walled seamless steel pipes across the country have shown a weakening trend. Specifically, due to hindered demand release in some regions, only a few cities in East China have shown relatively stable demand. However, it's difficult for the small horse to pull the big cart in a situation where overall demand is insufficient. Moreover, the downward trend in the black futures market has further dampened market optimism, and the weakening trend in spot prices has not changed.
End of the month order submission concluded, short-term due to order circulation resources tightening and price firming easing, the terminal demand's support weight on billet market prices increases. Downstream billet steel mills continue to accumulate finished products, market transactions are not smooth, and the pressure to recycle funds and deplete inventory intensifies, potentially suppressing billet market demand. Recently, steel mill losses have worsened, compounded by increased heavy pollution during autumn and winter, which may lead to a decrease in capacity utilization. On the raw material front, coke prices have started to decline, weakening cost support. Macroscopically and sentiment-wise, the Federal Reserve's interest rate hike has caused market confidence to wane, and short-term利好support for the market is weak. Historically, once bearish news is exhausted, it may lead to a rebound after overselling. Focus on the policy's impact on market confidence after the rate hike, and changes in the depleting inventory of finished steel and billet mainstream warehousing stocks in November. It is expected that billet prices may initially decline before rising, with limited rebound space if an overselling rebound occurs. On the supply side: due to the continuous downward adjustment of scrap steel raw materials, short process enterprises' profit margins increase. However, with relatively stable prices for iron ore and coal, and the retail prices of thick-walled seamless steel pipes continuously falling, the high furnace loss situation becomes more widespread, and the number of shutdowns and production cuts is also increasing. Therefore, it is expected that next week's production will show narrow fluctuations.
Demand-wise: Current demand release is hindered in some regions across the country, with only certain cities in the East China region showing relatively stable demand, yet this is insufficient to boost national demand. With no market across the nation returning to normalcy, regional differentiation will persist, leaving little room for demand growth. Attitude-wise: Amidst the weakening trend of both futures and spot prices, market sentiment is extremely pessimistic, and there is a severe lack of confidence. This has led merchants to consistently pursue the strategy of reducing inventory and hedging risks. Overall, it is expected that the retail price of local thick-walled seamless steel pipes will continue to trend slightly downward next week.
