Favorable Factors:
1. Mill inventories are staying relatively low, giving pipe manufacturers the leverage to push up ex-factory prices even when downstream demand is soft.
2. Raw material costs for hot-rolled strip steel and steel billets have shown resilience, creating a solid cost floor that supports the upward movement of finished pipe prices.
3. Upstream producers are actively planning to raise output prices, driven by sustained billet costs and strategic supply control.
Adverse Factors:
1. Downstream procurement remains highly cautious with sluggish trading volumes, which limits the actual execution of price hikes at the retail level.
2. Seasonal weather conditions and a traditional off-peak period are restricting outdoor construction projects, keeping overall demand quite weak.
3. Profit margins for pipe processing are narrowing, forcing many enterprises to operate strictly on a just-in-time production basis to avoid financial risks.
Outlook:
Despite the ongoing weakness in downstream demand and sluggish trading activity, the combination of low mill inventories and resilient raw material costs is driving an upward trend for ERW black steel pipe prices this week. However, the actual price gains might face resistance at the consumer end, leading to a scenario where prices trend higher but with limited momentum as the market navigates between cost support and weak consumption.
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