The seamless pipe market is improving in China. Most Chinese pipe manufacturers have raised their domestic prices for seamless pipes by RMB 200-300/mt ($25-40/mt) over the past two weeks, with market transactions also improving in the recent period. The main reason for the price rise is the increasing price of raw materials, which has pushed up production costs.
Chinese domestic prices of seamless pipes, 2"-6" grade B according to ASTM A106 or GB/8163, are varying at around RMB 5,500-5,800/mt ($805-850/mt) ex-works, including 17 percent VAT. Domestic quotations of tubing pipes of 2"-4" size, grade J55 as per API 5CT, plain-ended, are at about RMB 6,200-6,600/mt ($910-970/mt) ex-works. Chinese domestic prices for casing, 6"-8" grade J55 according to API 5CT, are varying at around RMB 6,000-6,300/mt ($880-920/mt) ex-works.
In February this year China produced 1.489 million mt of seamless pipes, 1.6 percent higher than in February 2009. Total production for the first two months of this year was 3.262 million mt, up 13.5 percent over the same period last year.
However, export of seamless pipes from China continued to fall. According to the China Iron and Steel Association (CISA), in February China exported 226,600 mt of seamless pipes, indicating a decrease of 13 percent from the January level and down nine percent year on year. Exports of seamless pipes from China for the first two months of this year reached 487,500 mt, down 17.2 percent on the corresponding period of last year. China's major export destinations for seamless steel pipe were Kuwait, India, US, South Korea and Iran.
Meanwhile, current export offers of seamless pipes from Chinese manufacturers for 2"-6" grade B material according to ASTM A106/API 5L are on average at $800-850/mt FOB. Export quotations for 2"-4" tubing J55 as per API 5CT, plain ends, are in the range of $950-1,000/mt FOB, while quotations for 6"-8" casing are at $920-950/mt FOB.
Market insiders maintain their optimism towards the future market, holding the view that the prices may go up due to growing raw material quotations and notable signs of increase in the CIS countries.