Local Chinese steel pipe market still weighed down by poor demand

Thursday, 05 June 2014 16:25:10 (GMT+3)   |   Shanghai
       

The Chinese domestic steel pipe market has been mostly stable in the past week, though with slight decreases also observed - for both seamless and welded pipes. 
 
As of June 5, 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 $655/mt, with 20# (GB/T8163-1999) grade 219 mm x 6 mm seamless pipe at $696/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 $574/mt and $577/mt respectively. All the above prices include 17 percent VAT.
 
China domestic seamless pipe market has mainly moved sideways in the past seven days, but with some minor downticks in prices also seen. Billet prices have softened slightly, while traders point to low demand as the main reason for the small declines witnessed in some seamless pipe prices. Traders are being cautious and are purchasing only in line with their needs. For the coming week, the market is also expected to be mostly stable, with some small decreases also likely.

The local Chinese welded pipe market has also been generally stable, though with some small price declines as well, in the past week. Prices of feedstock, i.e., steel strip, have weakened a little, while trading activity is slow. Producers have reduced their capacity utilization rates in order to avoid strong pressure from inventory. Market activity has increased a little after the Dragon Boat Festival (May 31-June 2) but is still slow. Traders are somewhat pessimistic as demand in the summertime will likely be hit by high temperatures and the rainy season. It is expected that the local Chinese welded pipe market will still be characterized by weak demand and some downticks in prices in the week ahead.


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