Over the past two weeks welded pipe prices in China have been driven up by rising prices for hot rolled coil (HRC). Rising local prices for flat steel products have boosted the production costs of pipe mills. Prices for HRC in the main cities in China have risen by RMB 200/mt week on week and even by RMB 380/mt in a few cities. At the same time, market insiders report that the demand for welded pipes from end-users is still weak. Domestic quotations of welded pipes in China have increased by RMB 200-300/mt ($30-45/mt) over the past two weeks, while export prices have moved up by $20/mt. However, many market players are worried about how long this rebound will last. Welded pipe stocks remain at high levels while demand from both local and foreign customers is not very good. Under such circumstances, though there are signs indicating a recovery in the steel market, due to lack of support it is impossible to see real upturns in the welded pipe market.
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the domestic market at an average of RMB 4,100-4,300/mt ($605-635/mt) ex-works. These local market prices include 17 percent VAT.
According to the China Iron and Steel Association (CISA), in June China produced 3.32 million mt of welded pipes, more than May's 2.8 million mt and marking an increase of 19.9 percent year on year. Meanwhile, China's welded pipe production in the first half of this year reached 15.938 million mt, up 17.9 percent on the corresponding period of last year.
Current export prices of Chinese welded pipes, 2"-6" grade B according to ASTM A53/API 5L, are varying at around $720-760/mt FOB on actual weight basis.
According to the CISA, in June China exported 280,805 mt of welded pipes, indicating an increase of 3.24 percent compared to the May level and up 47 percent year on year. China's total welded pipe exports in the first half of this year reached 1.335 million mt, up 1.7 percent year on year.