Weak Demand, Yet Resilient Welded Pipe Prices? The Key Lies in These Three Points
MySteel Steel Pipe Division research statistics: Since 2025, the average daily transaction volume of 178 sample welded pipe trader enterprises nationwide has shown a gradual downward trend. The pace of market demand release has significantly slowed compared to the same period in previous years. The weakness on the demand side is mainly constrained by two core factors: Firstly, the real estate industry has seen a substantial reduction in project development and investment scale. As a core downstream application field for welded pipes, the contraction in real estate demand directly lowers the overall market demand volume. Secondly, downstream enterprises are facing significant increases in financial pressure, leading to more cautious procurement decisions and spreading wait-and-see sentiment. However, in such a market context, welded pipe prices continue to show strong resilience. What are the fundamental reasons behind this? The following provides a brief analysis from several aspects: Reason One: Significant Results from Inventory "Slimming" The national total welded pipe inventory has achieved a slight decrease compared to last year. As of September 19, 2025, the total national welded pipe inventory, including mainstream steel warehouses tracked by MySteel (61 warehouses), was 1.2403 million tons, a month-on-month decrease of 13,200 tons and a decrease of 147,900 tons compared to the same period in 2024. Inventory has entered a "slimming" bottleneck period.The core driving logic behind the current stable inventory level stems from the combined effect of two key factors leading to a dual inventory decrease: First, weak demand forces destocking. Weak end-user demand directly leads traders to universally adopt the operational strategy of "actively destocking and accelerating capital recovery," ultimately driving down social inventory. Second, production contraction actively reduces inventory. Welded pipe manufacturers, based on market judgment, independently reduce output, directly leading to a decrease in factory inventory from the supply side. Reason Two: Strengthened Cost Support Expectations 1. Strip Steel Market: Supply-Demand and Inventory Combination Supports Prices
Looking at core data from the strip steel market, the supply side shows a clear recovery trend: According to MySteel statistics, as of September 19, the operating rate of key national hot-rolled strip steel production enterprises reached 77.00%, up 2 percentage points week-on-week and 4 percentage points month-on-month. Capacity utilization rate synchronously increased to 78.10%, rising 4.46 and 1.53 percentage points week-on-week and month-on-month, respectively. Output consequently grew, with actual output this week at 2.3095 million tons, an increase of 131,900 tons from last week and 48,200 tons from last month, indicating a significant increase in supply-side activity. The inventory side shows characteristics of "local inventory accumulation, overall differentiated decrease": Although plant inventory at steel mills increased slightly by 3,800 tons this week, the regional social inventory structure better reflects real market demand. Only North China and East China regions saw slight inventory accumulation, while social inventories for strip steel in most other regions showed a decreasing trend.
This combination of supply-demand and inventory directly points to rising purchasing willingness in the trade sector: Against the backdrop of recovering supply, inventory in most regions can still decrease, essentially supported by both downstream rigid demand and speculative demand. This provides important upward momentum for the current strip steel price. The short-term fundamentals of the strip steel market present a positive pattern of "increasing supply, decreasing inventory, and demand providing a floor." 2. Iron Ore Market: Multi-dimensional Factors Fortify Price Bottom
Looking at core data and related sector dynamics in the iron ore market, multi-dimensional factors may collectively provide bottom support for iron ore prices. Firstly, the iron ore supply side shows tightening signals of "high global shipments, declining domestic arrivals": Last week, global iron ore shipments increased week-on-week to 35.731 million tons, remaining at a high level and showing a cumulative year-on-year increase of 8.32 million tons this year, indicating sufficient global supply. However, domestic arrivals decreased week-on-week to 23.923 million tons, meaning the actual scale of arrivals in the domestic market is contracting, and the supply-demand matching rhythm is tilting towards tightness. Secondly, demand-side hot metal production continues to grow, directly driving iron ore consumption: This week, the average daily hot metal output of 247 sample steel mills recovered to 2.4102 million tons, maintaining a continuous growth trend. As a core indicator of iron ore demand, the steady increase in hot metal production means steel mills' procurement demand for iron ore is continuously being released, providing fundamental support for the iron ore price from the demand side. Finally, cost-side coke price "expectations of price hikes heat up after thorough declines": Recently, after two rounds of price cuts in the coke market, coke plant profits have been extremely compressed, basically closing the room for further price declines. Moreover, some coking enterprises have already initiated price hikes of 50-55 yuan/ton, with major coke enterprises proposing the first round of increases, making the industry's price hike expectation gradually clearer. As an important raw material for steel mills, the cessation of decline and rebound in coke prices will push up steel mill production costs. In summary, the supply-demand improvement brought by reduced domestic iron ore arrivals and recovering hot metal production, coupled with the cost support from the cessation of decline and proposed hikes in coke prices, collectively form a price floor support force for raw material costs, significantly reducing short-term downside price risks. Reason Three: Reduced Willingness to Offer Discounts After Pipe Plant Profit Contraction
1. The Reality of Profit Contraction
Domestic pipe plants are currently facing significant profit contraction pressure. Overall profitability has continuously fallen to the cost edge, with some enterprises even at the critical state of "meager profits" or "break-even." This operational reality directly determines that pipe plants' willingness to reduce prices has significantly decreased.
Pipe plants' profit margins are being rapidly compressed. On the one hand, upstream, core raw material prices such as steel and non-ferrous metals, affected by commodity market fluctuations, remain at relatively high levels. On the other hand, downstream, the pipe demand market shows characteristics of a "weak recovery." Procurement rhythms in major application areas like real estate and infrastructure have slowed, order scales fall short of expectations, and intensified market competition weakens pipe plants' bargaining power, forming an inverted pattern of "rising costs, stable selling prices." Additionally, the rigid rise in logistics, transportation, and labor costs continuously pushes up the production cost baseline for pipe plants, compressing profit space towards the cost red line. 2. Core Logic Behind Low Price Reduction Willingness in Pipe PlantsAgainst this background, pipe plants' willingness to reduce prices has dropped to a low level. On the one hand, current profit levels are approaching the cost critical point. Further price reductions would directly push most enterprises into loss territory. To maintain normal production and operation and cover fixed costs, pipe plants need to hold the current price bottom line, avoiding increased operational risks due to price cuts. On the other hand, from a market expectation perspective, pipe plants have uncertain judgments regarding future raw material price trends. If they actively reduce prices now and raw material prices rebound later, cost pressure will be further transmitted, and enterprises will face a passive situation of "having no room left to reduce." Therefore, they prefer to observe market changes with a "price stabilization" strategy rather than blindly cutting prices to seize short-term orders.
From the perspective of the steel industry's fundamentals, the current welded pipe market has relatively relaxed resource supply. During the "Silver October" period, the demand side possesses strong repair resilience, laying the foundation for stable market operation.
However, two risk points still need vigilance: First, the pace of market demand release may fall short of expectations. If end-user procurement does not effectively follow up, it may constrain the room for price increases. Second, the effectiveness and intensity of macro-policy implementation carry uncertainty, requiring continuous attention to the actual pulling effect of policies on the market. Overall, in October 2025, national welded pipe prices may show a trend of "relatively strong volatile adjustment." Market operation will rely more on the actual changes on both supply and demand sides, as well as marginal influences from policies and costs.
