Over the past two weeks there have not been any significant changes in the Chinese welded
pipe market. Domestic and export quotations of welded pipes have remained at previous levels due to the stabilization of coil prices. At the same time, both local and foreign consumers show little interest in Chinese welded pipes as the weak season persists. Meanwhile, the launch of infrastructure construction projects is anticipated and steel production costs remain high. Welded
pipe prices are predicted to surge again, probably in September-October when the season for higher demand arrives. Rising raw material costs will also not allow welded
pipe prices to go down. Meanwhile, overcapacity of welded pipes in the domestic market and the search for new export markets remain the main issues for market players.
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the domestic market at an average of RMB 4,350-4,500/mt ($640-660/mt) ex-works. These local market prices include 17 percent VAT. Domestic prices of ERW pipes of grade B made to ASTM A53/API 5L are at around RMB 4,900-5,200/mt ($720-765/mt) ex-works.
Market sources report that, while the excessive supply of welded pipes to the domestic market has eased up to some degree, the oversupply situation will remain. According to the
China Iron and Steel Association (CISA), in July
China produced 2.989 million mt of welded pipes, less than June's 3.32 million mt and marking an increase of 5.4 percent year on year. Meanwhile,
China's welded
pipe production in the first seven months of this year reached 18.824 million mt, up 15.4 percent on the corresponding period of last year.
Current export prices of Chinese welded pipes, 2"-6" grade B according to ASTM A53, are varying at around $740-780/mt FOB on actual weight basis.