Mysteel Annual Report: Review of Domestic Seamless Steel Pipe Market in 2024 and Outlook for 2025

In 2024, China's seamless steel pipe market showed a complex and changeable situation under the influence of multiple factors. Global economic uncertainty is still high, coupled with factors such as weak domestic real estate and debt risks, the overall recovery process is relatively slow, and the endogenous driving force is still insufficient, which suppresses the overall demand for steel. Against this background, the price fluctuation range of the seamless steel pipe market has expanded compared with 2023, and the average price continues to move down year-on-year. Looking back at 2024, the price of the seamless steel pipe market remained high in the first quarter and low in the second quarter. After the Spring Festival, the price fell rapidly. After a slight rebound in April and May, it continued to decline. By mid-September, the price fell below the lowest level in the past three years, but began to rebound rapidly at the end of September. Raw material prices and theoretical profits are both on a downward trend, industry competition is intensifying, pipe factory profits have declined significantly, production has shrunk significantly, and corporate benefits are poor. At the same time, the demand and export of seamless steel pipes are both on a downward trend, but China's seamless pipe export prices still have obvious advantages in the international market.

Looking ahead to 2025, with the gradual implementation of macroeconomic policies, the market has gradually established new expectations. In terms of supply, although the output of seamless steel pipes will decline in 2024, the market has improved after entering the fourth quarter, and the short-term factory inventory pressure has eased. However, the sustainability of market demand release remains to be verified, and the domestic seamless pipe supply will remain tight in the fourth quarter. On the demand side, with the recovery of the global economy and the accelerated advancement of infrastructure construction, the market demand for seamless steel pipes is expected to continue to increase under the impetus of multiple industries. At the same time, domestic policy support may also bring about a short-term rebound in market demand. In the future, the seamless steel pipe industry will pay more attention to sustainable development, increase environmental protection investment, and achieve green production. Industrial chain integration and coordinated development will become an important trend in the development of the industry. By strengthening the cooperation between upstream and downstream enterprises, building a sound supply chain system, and improving overall competitiveness. In addition, intelligent transformation and digital transformation will also become an important direction for the development of the industry, improving production efficiency and product quality, reducing labor costs, and enhancing production flexibility and response speed.

1. Price and Profit

1. The average price of seamless pipes will fall in 2024, with a significant drop in the third quarter

The price trend of seamless pipes was relatively stable in the first half of 2024, with a large drop in the third quarter and a decline in the fourth quarter. The overall price trend was high at the beginning and low at the end. According to Mysteel statistics, as of December 4, the national average price of seamless pipes (taking 20#, 108*4.5mm as an example) was 4,706 yuan/ton (the historical median price was 4,723 yuan/ton), down 166 yuan/ton from the beginning of the year (4,872 yuan/ton at the beginning of the year), and down 292 yuan/ton from the average price in 2023 (4,998 yuan/ton), a drop of about 6.20%.

2, Profit of sample seamless pipe production enterprisesThe decline is more obvious

As of December, the average profit of sample seamless pipe mills for blast furnaces and electric furnaces in 2024 was about 255 yuan/ton, down 82 yuan/ton from 337 yuan/ton in 2023. The profit has declined significantly since November and has recently been close to the cost line; the average profit of sample seamless pipe mills for adjusted billet rolling in 2024 was about -19 yuan/ton, down 57 yuan/ton from 38 yuan/ton in 2023, and the number of loss-making days has increased significantly, the operating pressure of enterprises has increased significantly, and market competition has intensified.

3. The profit performance of core listed companies is obviously differentiated

In 2024, the profits of key domestic seamless pipe enterprises decreased to varying degrees year-on-year. Taking Changbao Co., Ltd. as an example, Changbao achieved operating income of 2.804 billion yuan in the first half of the year, a year-on-year decrease of 18.94%, and net profit of 411 million yuan, a year-on-year decrease of 33.82%. Among them, the gross profit performance of core listed companies is obviously differentiated, and the profit performance of production enterprises with a higher export share and high added value of products is significantly better than that of other companies, with obvious differentiation.

2. Production and Inventory

1. Annual output year-on-yearPresentationdecline,Production decline diverged

According to Mysteel's survey of 130 seamless pipe manufacturers across the country (capacity coverage exceeds 95%): the domestic output of seamless steel pipes in 2024 will drop significantly compared with last year, with an estimated total volume of 29.7 million tons, a decrease of 1.8 million tons compared with 2023, a decrease of 6.6%.

From January to early December 2024, Mysteel statistics show that the output of 33 mainstream seamless pipe mills totaled 14.4199 million tons, a decrease of 771,700 tons from the same period last year, a decrease of about 5.08%; according to data from the China Iron and Steel Association: From January to September, the output of most mainstream seamless pipe manufacturers showed a downward trend. The output of 8 mainstream pipe mills was about 8.857 million tons, a decrease of 409,800 tons from last year, a year-on-year decrease of about 4.42%.

It can be seen from the decline ratio (the data from the China Iron and Steel Association are mainly based on large state-owned enterprises, and Mysteel surveyed 33 sample enterprises including some small and medium-sized enterprises, and small and medium-sized enterprises accounted for a larger proportion of the 130 sample enterprises) that the production enterprises with larger production capacity and market share have obviously had a lower decline in output this year than the production enterprises with smaller production capacity and market share.

2. Factory inventory has not changed much year-on-year, while social inventory has obviously decreased

Factory inventory: Mysteel surveyed mainstream seamless pipe factories (33 production enterprises, 122 production lines) and found that the inventory was generally higher than the same period last year. The inventory of pipe factories has been rising since February. According to the latest survey, the inventory of sample pipe factories reached 700,100 tons, which was basically the same as the previous year. This year, affected by the decline in market conditions and demand, the inventory of pipe factories was digested slowly, and the production end was under obvious pressure.

In terms of social inventory: At the beginning of this year, most market customers still had winter storage operations. In February, the social inventory of seamless pipes reached a peak, and the inventory began to decline after the New Year. However, in April and May, the overall market digestion speed was limited, and the rate of inventory decline slowed down. After June, the market weakened, and merchants had a strong desire to actively reduce inventory, and social inventory showed a significant decline. As of early December, the social inventory of seamless pipes was 668,600 tons, a year-on-year decrease of 26,900 tons. Overall, traders have a strong awareness of inventory risks this year.

3. Demand andEnterexit

1. TransactionA year-on-year decrease，Demand fell significantly in the second half of the year

In 2024, the domestic demand for seamless steel pipes showed a slight downward trend. Judging from the transaction volume of sample enterprises (123 sample enterprises) in the trade link surveyed by Mysteel, the market transaction performance at the beginning of the year was still noteworthy, but since the end of June, demand has declined significantly, and the transaction volume of sample enterprises has shown a downward trend. The average daily transaction volume of sample enterprises in 2024 was 13,531 tons, a year-on-year decrease of 3.44%; from the perspective of apparent consumption, according to Mysteel survey data, the output of seamless steel pipes in 2024 is estimated to be about 29.7 million tons, a year-on-year decrease of 1.8 million tons. Based on this calculation, the apparent output of seamless pipes in my country in 2024 will be about 24.657 million tons, a year-on-year decrease of 1.2514 million tons.

2、Seamless pipe exports still maintain a certain degree of toughness, with limited decline

In 2024, my country's seamless steel pipe export volume is expected to be about 5.2 million tons, a decrease of about 5% from 2023. In 2024, the average export price and export volume show a "quantity and price decline" trend. It is estimated that the average export price will be US$1,269.82 per ton by 2024, a decrease of US$182.51 from the average export price of US$1,452.33 per ton in 2023. The main reasons for the slight decline in my country's seamless steel pipe export volume in 2024 are: (1) In 2024, the number of new international oil and gas-related investment projects slowed down, and the demand for oil casing declined slightly. However, seamless steel pipes for oil and gas-related purposes have always been the main variety of my country's seamless steel pipe exports. Affected by this, my country's seamless steel pipe export volume showed a downward trend year-on-year; (2) The domestic and foreign demand disturbance factors intensified, resulting in a year-on-year decline in the export volume of seamless pipes, and the export volume of oil and gas drilling seamless pipes and boiler pipes declined particularly significantly; (3) International trade frictions intensified. In 2024, there were two trade friction incidents in my country's seamless steel pipe exports. Among them, the European Commission launched an anti-dumping investigation on seamless steel pipes originating in my country, which further affected my country's seamless steel pipe exports.

IV. 2025seamlessSteel Pipe Market Outlook

1. Supply Outlook:Production capacity continues to rise, corporate competition intensifies, and there is limited room for output changes

Supply Outlook: In 2025, the production capacity will continue to rise, the industry competition pressure is relatively high, and the survival space of pipe factories may continue to shrink. In 2025, there will still be foreign entrants in the industry, and the industry competition environment will still be relatively arduous, but on this basis, the industry's "catfish effect" may be reflected, and the industry will move forward in the competition. Carbon trading may continue to advance in 2025, which will have a greater impact on the steel industry, or may have a greater compression on steel supply and thus improve the supply and demand relationship. It is estimated that the output of seamless steel pipes in 2025 will be around 30 million tons.

2. Demand Outlook: DemandStill resilient，The total amount may not change much

From the downstream perspective, there will still be considerable incremental demand in the fields of steel structure and infrastructure, such as pipeline transformation, guardrails, water conservancy, electricity, oil and gas pipelines, and thermal power. Overall, demand will remain resilient in 2025, but structural changes will still occur in different types of steel pipes. Due to the continued enthusiasm for international oil and gas investment, overseas demand will remain resilient, but we must be vigilant against the rise of trade protectionism, and exports may still remain at 5 million tons.

3. Raw material outlook: The supply of tube steel will remain loose

In 2024, the output of tube billet steel will continue to rise. Looking ahead to 2025, the output of hot-rolled tube billets may decline due to the influence of demand, and the continuous casting tube billets may increase slightly due to the resumption of production of steel mills. It is expected that the supply of tube billet steel will still be loose in 2025, but the regional performance may vary. Among them, the resources in Shandong are relatively tight, but in 2025, as the output of continuous casting tube billets recovers, the situation will improve;

4. Price prediction: In 2025, the price of seamless pipes may show a "low at the beginning and high at the end" trend. The average price of seamless pipes may move up by 50-100 yuan/ton. There may still be a wave of downward pressure in the first half of the year, and the annual price peak may appear in the fourth quarter.