Favorable Factors:
1. Strip steel rebounded to 3,340 CNY/MT; market sentiment improved after recent dip
2. Government special bond issuance ongoing; 800B CNY fiscal support sustained in Q2
3. Infrastructure projects steady in Middle East and Africa; pipeline demand firm
4. Positive signals from US-China trade talks; export sentiment could benefit
5. Iron ore and coke prices stabilizing; cost floor support holding
Adverse Factors:
1. Strip steel still down from previous weeks; cost pressure persists
2. EU tariff policy remains restrictive; 50% surcharge on over-quota from July 1
3. CBAM compliance costs rising; carbon certificates required for EU exports
4. Downstream buyers cautious at current price levels; sales volume weak
5. Southern China entering peak rainy season; construction activity to slow
Outlook:
ERW pipe FOB prices expected around $585-590/MT this week. Raw material costs remain volatile but above 3,300 CNY support level. Government infrastructure spending and pipeline projects provide demand base. However, lingering cost easing, cautious buyer sentiment, and seasonal headwinds suggest limited upside. Focus on Middle East and Africa markets where demand is steadier.
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