Seamless pipe producers in China have lowered their prices on the back of the softening in round billet quotations and weaker steel market sentiment. Over the past two weeks domestic quotations of seamless pipes have decreased by RMB 300-500/mt ($40-75/mt), while export prices have declined by a maximum of $40/mt.
The slowdown in real estate investments in China has affected demand for seamless pipes in the domestic market. At present, the automotive, appliance and other seamless pipe consuming industries are facing greater sales pressure. The decline in seamless pipe prices is forcing some players in the sector to cut production. Demand for Chinese seamless pipes from foreign customers also remains poor, with some orders coming from Southeast Asia, the Middle East and South America.
If mills make further sharp downward revisions to their round billet prices, it will further aggravate the situation in the weak and depressed seamless pipe market. Chinese market participants generally forecast a further decline in seamless pipe prices for August. The seamless pipe market in China is expected to remain soft due to China's adjustment of its macroeconomic policies and persistent oversupply in the steel industry.
Current round billet prices in China are at around RMB 4,050-4,100/mt ($600-605/mt) ex-works with 17 percent VAT.
Chinese domestic prices of seamless pipes, 2"-6" grade B according to ASTM A106 or GB/8163, are varying at around RMB 5,200-5,500/mt ($770-810/mt) ex-works, including 17 percent VAT.
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 $770-865/mt FOB, while 16" pipes are at $860-960/mt FOB.
Export quotations for 2"-4" tubing J55 as per API 5CT, plain ends, are in the range of $1,030-1,070/mt FOB, while quotations for 6"-8" casing are at $940-980/mt FOB.