Local Chinese steel pipe market boosted by cost-side support

The local Chinese steel pipe market has moved on an upward trend during the past week.
 
As of October 20 in China's three main steel markets, i.e., Shanghai, Guangzhou and Beijing, the average price of 20# (GB/T8162-1999) grade 108 mm x 4.5 mm seamless pipe now stands at $539/mt (RMB 3,633/mt), with 20# (GB/T8163-1999) grade 219 mm x 6 mm seamless pipe at $548/mt (RMB 3,690/mt). Meanwhile, on the same date, Q195-215 grade 48 mm x 3.25 mm welded pipe and Q215-235 grade 114 mm x 3.75 mm welded pipe prices in the above markets are standing at $437/mt (RMB 2,943/mt) and $436/mt (RMB 2,937/mt) respectively. All the above prices include 17 percent VAT.
 
The local Chinese seamless pipe market has moved up by relatively large price margins during the past week, while overall trading activity has increased and is mostly at normal levels. Strong increases in upstream billet prices and low pipe inventory levels have contributed to the increases in seamless pipe prices. As for the coming week, it is believed that the upward trend may continue but by smaller margins as the higher prices may negatively impact demand.
 
Chinese domestic welded pipe prices have risen slightly in the past week, while overall trade activity is better compared to September but is still at low levels. Higher costs have been the main factor contributing to the rise in prices. The upward trend of prices is not expected to last long in the absence of support from the demand side.

17 percent VAT is included in all prices and all prices are ex-warehouse.
 
$1 = RMB 6.74