Chinese seamless pipe prices down slightly

Thursday, 03 June 2010 16:32:03 (GMT+3)   |  
       

Prices for Chinese seamless pipes have lately slackened their rate of decline. Over the past two weeks domestic quotations of seamless pipes have sunk by a maximum of RMB 100/mt ($25/mt), while export prices have fallen by $10-20/mt. Both ex-works prices of round billet and seamless pipe have less space to fall currently. Market insiders believe that seamless pipe prices in China will enjoy relative stability in the coming weeks. The weak demand in both the domestic and international markets is unlikely to be revived in the short term.

Chinese domestic prices of seamless pipes, 2"-6" grade B according to ASTM A106 or GB/8163, are varying at around RMB 5,500-5,900/mt ($805-865/mt) ex-works, including 17 percent VAT.

Сurrent export offers of seamless pipes from Chinese manufacturers for 2"-6" grade B material according to ASTM A106/API 5L are on average at $800-870/mt FOB, while 10"-16" pipes are at $860-900/mt FOB. SteelOrbis has learned about offers of ½"-3/4" seamless pipes of steel grade B made to ASTM A106 at around $1,100/mt FOB. Export quotations for 2"-4" casing J55 as per API 5CT, plain ends, are in the range of $925-1,025/mt FOB.

Seamless pipe producers in China report that their exports to US have been substantially affected since 2008 when that country started to investigate Chinese pipe exports. Chinese pipe makers started to shift their focus to other markets two or three years ago, gradually reducing their exports to the US.

According to the China Iron and Steel Association (CISA), in April China exported 277,406 mt of seamless pipes, indicating a decrease of 0.46 percent from the March level and down 0.24 percent year on year. Exports of seamless pipes from China for the first four months of this year reached 1,043,542 mt, down 8.4 percent on the corresponding period of last year.

Chinese pipe manufacturers have been forced to change their pattern of business; some enterprises are returning to the domestic market, while other competitive companies are turning to entrepot trade. Some steel groups have been looking towards emerging markets such as Southeast Asia, North Africa and South America. In this way, they are able to compensate for the loss of the US market due to its increased protectionism. According to market sources, the profit margin for the seamless steel sector is only around one third what it was several years before.


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