Seamless Steel Tube Market Poised for a Turnaround Due to the Traditional Peak Season Approaches

I. Seamless Steel Tube Prices at Near 5-Year Low, with Significant Technical Support

As of February 27, 2025, the average price of seamless steel tubes nationwide has decreased by approximately 9.8% year-on-year compared to 2024. Currently, seamless steel tube prices are at their lowest level in nearly five years and are aligned with the historical median price level, indicating a relatively low price position with strong technical support.

II. Fundamentals of the Seamless Steel Tube Market Remain in a Relatively Weak Equilibrium

1. Large Manufacturers Recover Quickly on the Supply Side, While Small Manufacturers Operate at a Slower Pace

In 2024, domestic seamless steel tube production significantly declined compared to the previous year, with an estimated total output of 29.7 million tons, a decrease of 1.8 million tons or 6.6% year-on-year compared to 2023. Entering 2025, the recovery of seamless steel tube supply has been relatively rapid. The latest data shows a weekly production of 337,400 tons, an increase of 16,000 tons from the previous week and 80,100 tons year-on-year; capacity utilization rate stands at 73.03%, up 3.46% from the previous week and 17.12% year-on-year; operating rate is 51.64%, up 1.64% from the previous week and 18.85% year-on-year. This is mainly reflected in the accelerated recovery of supply from large manufacturers, while small manufacturers are recovering at a slower pace.

2. Demand Recovery is Relatively Slow

Entering 2025, downstream project commencement progress has been relatively weaker than in previous years, with downstream capital issues still prominent, and overall downstream confidence performing moderately. Currently, the demand for seamless steel tubes in the manufacturing sector is rebounding faster than that in infrastructure projects. Overall, post-Spring Festival demand has shown a relatively slow recovery. However, the overall demand situation in 2025 is expected to improve, with considerable demand growth expected in steel structure and infrastructure sectors such as pipeline network renovation, guardrails, water conservancy, electric power, oil and gas pipelines, and heating systems. Overall, demand remains resilient.

III. Profit Levels are Relatively Low, with Strong Willingness Among Manufacturers to Maintain Prices

Throughout 2024, profits for seamless steel tube manufacturers were general, with a significant increase in the number of loss-making days, significantly increased operational pressures on enterprises, and intensified market competition. Entering 2025, current profits for tube manufacturers are at low levels, with cost support being evident, and a relatively strong willingness among manufacturers to maintain prices.iv

IV. Macro Policy Benefits are Worth Anticipating

In 2025, China will implement a loose monetary policy and a proactive fiscal policy. Additionally, the Federal Reserve may still have the possibility of lowering interest rates. With important meetings approaching in the near future, China is likely to continue introducing stimulus policies beneficial to the real estate sector and people’s livelihoods. The macro environment is expected to have a far more positive impact on the market than in 2024. The favorable macro policies may bring certain development opportunities to the seamless steel tube market, stimulating investments and production in downstream industries, thereby increasing demand for seamless steel tubes.

Based on the above analysis, with the arrival of the traditional peak season in 2025, the seamless steel tube market faces certain challenges but also presents numerous opportunities. From the supply side, the relatively slow release of seamless steel tube supply, coupled with potential production restrictions on the industry side, may provide some support to prices. From the demand side, despite the severe overall demand situation, demand growth in some downstream industries is still worth anticipating. Currently, overall inventory levels are maintained at a relatively moderate to low level, which is conducive to supporting seamless steel tube prices. In the context of favorable macro policies, the seamless steel tube market is expected to experience a certain degree of improvement.