On June 12, the spot price for 304 Dingxin material was 14,500 yuan per ton. Jinhai’s price was 13,750 yuan per ton. That is a gap of 750 yuan per ton. In past years, this gap would look unusual. But this quarter, it is just a normal number. The Wenzhou stainless steel welded pipe market is now paying the price for this gap.
Fewer Inquiries Turn Into Real Orders
June is the slow season for stainless steel nationwide. This is common knowledge across the industry. Every evening, market reports from Foshan and Wuxi say the same thing. End buyers are not placing many new orders. Most buyers only purchase what they need right now.
Wenzhou’s situation looks worse than other regions. Dainan and Foshan still see some sales because their traders can offer cheap material. In Wenzhou, fewer inquiries turn into real orders. Large orders are going to other regions instead. Traders and small pipe factories in Wenzhou feel more pressure to sell.
The reason is simple. Most raw material in Wenzhou comes from Dingxin. This material always costs more than what Dainan and Foshan can get.
Raw Material Costs Pass Down to Finished Pipes
Hot rolled narrow strip is the main cost behind welded pipes. Any price gap in raw material passes straight down to the finished product.
Right now, for the same wall thickness and surface finish, 304 pipe made in Wenzhou costs 200 to 300 yuan more per ton than pipe made in Dainan. Traders in Dainan usually buy large amounts of Jinhai material ahead of time. They send it to pipe factories together. This lowers shipping costs. Their total raw material cost stays much lower than Wenzhou’s.
For buyers, the choice comes down to simple math. The same pipe costs less in Dainan. There is little reason to keep buying from Wenzhou.
Slow Season, Rain, and Rising Costs Hit at the Same Time
If raw material were only a little more expensive, Wenzhou could still lean on its brand name and fast delivery. But this slow season brings several problems together.
Rain in the south is slowing down construction. Real estate, home renovation, plumbing projects, and equipment manufacturing all slow down in June anyway. The rainy season makes this worse. New orders are already low.
Molybdenum prices keep rising, and buyers are getting more careful. Molybdenum prices have climbed again and again in recent weeks. This pushes up the cost of grades like 316L. It also makes buyers more cautious across the whole stainless steel market. Markets in many regions report the same pattern. The higher prices go, the weaker demand gets. Buyers are not waiting for lower prices. They are waiting for a clearer signal.
Too much pipe supply nationwide is driving fierce price competition. Foshan, Dainan, Shandong, Jiangsu, and Zhejiang are all producing more pipe at the same time. Products look almost the same everywhere. Every region is fighting on price with cheap raw material. Wenzhou has a weak spot in raw material costs. In this nationwide price war, Wenzhou has almost no way to fight back.
Final Thoughts
On the surface, this round of order losses in Wenzhou looks like a slow season problem. But the slow season only makes the real problem bigger. The real problem sits in how Wenzhou buys its raw material.
For years, Wenzhou has depended on one main supplier. This adds an extra cost that other regions do not carry. When the market is strong, demand hides this extra cost. When the market turns weak, this extra cost becomes the final reason buyers walk away.