In 2022, the domestic economy will face triple pressures of shrinking demand, supply shocks, and weakening expectations. The external Federal Reserve will raise interest rates and the international order will be reshaped. The overall macroeconomic policy will first weaken and then strengthen. The steel market has been blocked several times, and steel prices have fluctuated by thousands of yuan. In this changing steel market landscape, welded steel pipes highlight the structural highlights of exports, improve supply depuration, and achieve a slight increase in apparent consumption. For 2023, many institutions are generally more optimistic. However, policy guidance still needs to pay close attention to external inflationary pressures, and internal uncertainties still exist. Steel demand is expected to be strong internally and weak externally. The second quarter has reached a growth high point, and the economic growth rate has increased throughout the year. For welded and plated pipe varieties, the autonomy in predicting price fluctuations has increased, showing a double-top trend.

1. Domestic welded pipe prices will shift downward in 2022

According to monitoring data from Lange Steel Network, as of December 28, the national average price of 4-inch (3.75) welded pipes was 4,480 yuan, a decrease of 978 yuan from the same period last year; the national average price of 4-inch (3.75) galvanized pipes was 5,257 yuan, a decrease of 978 yuan from the same period last year. It fell by 1,149 yuan in the same period last year; the national average price of 50*50*2.5 square tubes was 4,499 yuan, down 797 yuan from the same period last year; the national average price of 219*6 spiral pipes was 4,747 yuan, down 936 yuan from the same period last year.

2. Prices fell sharply twice in the second and third quarters, with a mild tail-off at the end of the year.

Taking the ex-factory price of 4-inch 3.75mm welded pipes in Tangshan as an example, the actual average ex-factory price of welded pipes is 4,547 yuan. Among them, the peak value in April was 5,330 yuan, an increase of 540 yuan from the beginning of the year, and the average monthly increase was about 100 yuan; while July hit a trough of 3,980 yuan, a decrease of 1,350 yuan from the peak, with an amplitude of 25.33%. The average profit of pipe companies fell to a record low in the middle of the year, and generally welded pipes and galvanized pipes complemented each other. The profits of comprehensive welded pipe companies fluctuate greatly, and the price difference between welded pipes and raw steel strips, and the price difference between galvanized pipes and welded pipes continue to trend in the opposite direction. During the year, the peak accounting profit of welded pipes was 255 yuan, and the trough was -235 yuan. The average price difference between welded pipes and strip steel was 187 yuan; the peak accounting profit of galvanized pipes was 377 yuan, and the trough was 93 yuan. The average price difference between galvanized pipes and welded pipes was 752 yuan. Overall, the pipe enterprises Profits are on the verge of losses.

Positive expectations for the start of 2023 are supported by two aspects: the macro economy must maintain a good upward trend; more than three years of epidemic prevention restrictions have completely ushered in a new stage. The two-year average GDP growth rate in 2023 is forecast to be around 5%. The overall demand pattern is strong internally and weak externally. The Federal Reserve's interest rate hike cycle may last until the first half of 2023. The possibility of the Eurozone and British economies falling into negative growth cannot be ruled out. Whether steel pipe exports can maintain a structural bright spot will be under pressure due to the rising base.

There is not much contradiction between supply and demand in the steel pipe industry chain. In 2023, the national crude steel statistical output will change by about 1% year-on-year. At the same time, the current factory inventory of steel pipes is at an all-time low. For steel market logic, prices will be highly dominated by demand. Demand is expected to boost inventory replenishment behavior and high costs; the arrival of demand will test fundamentals and trigger deep repair and rebalancing.