Favorable Factors:
1. Certain strip steel production lines have been shut down and exited the market, which helps reduce overall raw material supply and eases oversupply concerns.
2. Lower raw material costs provide downstream pipe manufacturers with better profit margins when restocking inventory.
3. Strict cash-settlement policies help steel mills improve their cash flow and financial health during this adjusting period.
Adverse Factors:
1. Strip steel and hot rolled coil exit prices have been broadly reduced, directly weakening the cost support for finished welded pipes.
2. Continuous price cuts from upstream mills reflect sluggish end-user demand and strong wait-and-see sentiment among buyers.
3. Aggressive price competition among mills trying to secure orders is dragging the overall market valuation lower.
Outlook:
With raw material costs continuing to slide and end-market demand remaining soft, the cost support for ERW black steel pipes is fading. Buyers are adopting a cautious approach, so prices are likely to remain under downward pressure in the near term as the market searches for a new bottom.
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