Price trend

According to data from SunSirs, seamless tube prices fluctuated and fell in June. At the beginning of the month, the quotation for 108 * 4.5 seamless tubes was 4,657.5 RMB/ton. At the end of the month, it dropped to 45,30 RMB/ton, a decrease of 2.74% and a year-on-year decrease of 1.63%.

Analysis review

In terms of raw materials: In June, Shandong tube billets fluctuated and fell, with an average price of 3,713-3,779 RMB/ton. In the first half of the year, the tube factory was basically at a loss in the first quarter, and in the second quarter, it was on the brink of profit and loss. The flow of resources within the factory could not reach a balance between production and sales. At the same time, the decline in seamless tubes in the second quarter was slower than the decline in tube blanks.

In terms of demand: It was in the traditional off-season, demand continued to decline, and traders were mostly following the adjustment of management factories. Due to the influence of the traditional rainy season in the south, actual transactions had been relatively sluggish. In addition, data from civil engineering and other sources showed that there had been no obvious improvement in downstream construction, and the situation of oversupply in the market had not improved. Traders had made hidden concessions to major customers.

In terms of exports: According to data from the General Administration of Customs, China exported a total of 9.631 million tons of steel in May 2024, a decrease of 407,000 tons from the previous month and a year-on-year increase of 4.4%; From January to May, the cumulative export of steel reached 44.655 million tons, a year-on-year increase of 24.7%; In May 2024, China exported 430,200 tons of seamless tubes, a year-on-year decrease of 21.15%. In May 2024, China imported 9,500 tons of seamless tubes, a year-on-year increase of 2.15%.

Market outlook

In summary, the raw material cost prices were weak in June, and downstream demand was relatively weak. Federal Reserve Director Bauman said in his speech that there is no expected interest rate cut in 2024, and the Federal Reserve may postpone the rate cut until 2025. June and July are the traditional off-season, coupled with weakened domestic and international demand, the off-season prices may be further suppressed. Overall, it is expected that seamless tube prices will operate weakly in July.

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