According to data from SunSirs, the price of seamless tubes fell weakly in May. At the beginning of the month, the quotation for 108 * 4.5 seamless tubes was 4,850 RMB/ton, but at the end of the month, it dropped to 4,585 RMB/ton, a decrease of 5.46% and a year-on-year decrease of 25.2%.
Analysis review
In terms of raw materials, the supply of tube billets slightly decreased, and steel mills intended to support prices. As of 30th, the price difference between steel billets and hot-rolled tube billets was maintained at 300 RMB/ton, while the normal price difference between the two is around 250 RMB/ton. Although there had been recent production reductions in steel mills, only a few had indicated that the tube blank contract was saturated in May, which hindered the willingness of steel mills to raise prices, and the tube blank prices were weak.
In terms of demand: From the perspective of major application industries, data from the Bureau of Statistics shows that from January to April, the national real estate development investment was 3,551.4 billion RMB/ton, a year-on-year decrease of 6.2%. In April, the construction area of real estate development enterprises' houses was 7,712.71 million square meters, a year-on-year decrease of 5.6%. The newly constructed area of houses was 312.2 million square meters, a decrease of 21.2%. The decrease in newly constructed area has expanded, indicating that real estate development enterprises are more cautious in land acquisition and investment. In terms of the machinery industry, according to data released by the China Construction Machinery Industry Association, in April 2023, 18,772 excavators of various types were sold, a year-on-year decrease of 23.5%, and 9,693 loaders of various types were sold, a year-on-year decrease of 11.7%. From the data, downstream enterprises also maintained a relatively cautious attitude in production and investment, and the demand for downstream industry tubes may not show significant growth in the short term.
In terms of import and export: According to the latest statistics from customs, China exported 500,800 tons of seamless tubes in April, an increase of 0.34% month on month and 98.73% year-on-year; From January to April, China exported a total of 2.0059 million tons of seamless tubes, a year-on-year increase of 86.84%. The external demand performance of seamless tubes was relatively ideal. Although overseas orders were concentrated and released, the overall supply of steel tubes still exceeded demand.
Market outlook
In summary, although the raw materials continued to weaken and the production costs of the tube factory decreased, the actual domestic and foreign orders of the tube factory had decreased by varying degrees since April. On the other hand, June August is the traditional hot off-season in the industry, and the demand for seamless tubes in downstream real estate and mechanical manufacturing industries is weak. It is expected that the price of seamless tubes will maintain a weak trend in June.
