Over the past two weeks China's welded pipe market has trended down slightly in line with falling HRC prices. Domestic quotations of locally produced welded pipes have decreased by RMB 400-700/mt ($55-100/mt), while export prices have dropped by $20-40/mt over the period of review.
Current domestic prices of Chinese ERW pipes 2"-6" Q215-Q235 grade are at RMB 3,800-4,400/mt ($560-645/mt) ex-works. These local market prices include 17 percent VAT and are on actual weight basis.
Export offers of Chinese ERW pipes, 2"-6" grade B according to ASTM A53/API 5L are being given at about $590-650/mt FOB. Export quotations of ERW pipes made to ASTM A53 only (without API marking) may go down to $550/mt FOB.
Interest from foreign customers in welded pipes from China has continued to decline in recent times. Thus, China's welded pipe exports in October came to 192,900 mt, down 159,800 mt or 45.31 percent year on year. Total exports in the January-October period reached 2.1057 million mt, down 892,800 mt or 29.78 percent year on year. Despite little interest coming from the exports markets, production of welded pipes in China is increasing: in October the output figure reached 2.88 million mt, 4.3 percent higher than in September this year. In addition, welded pipe production in China rose to 25.38 million mt in the January-October period this year, up by 21.6 percent year on year.
Chinese welded pipe producers expect that HRC prices may see an increase in the coming weeks due to the rising cost of raw materials. However, on the other hand, weak demand in the market is expected to limit any HRC price increase. Market players are not sure about the welded pipe price trend in the coming weeks due to the uncertainty surrounding quotations for flat products.