As the Spring Festival approaches, the supply and demand in the China's welded pipe market continue to shrink, and the market trading atmosphere is quiet before the holiday.
Since the Spring Festival of this year is 10 days earlier than last year in the solar calendar, this week is the second week before the Spring Festival. Some pipe factories have started to shut down for maintenance from this week, ranging from a minimum of 3 days to a maximum of a week. After the maintenance is completed, all workers will begin their Spring Festival holiday.
Most pipe factories will resume production around the 10th day of the new year. In terms of demand, with the start of the Spring Festival travel rush, most construction sites in various regions of the country have now stopped work, and some markets have already entered the closed market state ahead of time. Currently, most transactions in the market are mainly for pre-holiday stockpiling contracts by small and medium-sized dealers, with little actual downstream demand.
The shutdown period for 29 welded pipe manufacturing enterprises across the country is mainly concentrated around January 15th to January 22nd (the 21st day of the 12th lunar month), and the resumption of production is concentrated around February 5th to February 7th (the 10th day of the 1st lunar month).
The post-holiday inventory accumulation rate may be relatively slow. The operation mode of low production and low inventory in pipe mills is likely to result in supply shortages and specifications scarcity. Especially after the Spring Festival holiday, some merchants who did not stockpile for winter are highly likely to seize the opportunity to replenish their inventories. Overall, the supply side will not create excess pressure.