Over the past month the welded pipe market in Saudi Arabia has weakened a little. Domestic and export prices of locally produced welded pipes have declined by $50-100/mt over the period in question. Nevertheless, the prospects for 2010 appear very bright. There are signs of a recovery in oil demand in the developing and emerging economies. Market insiders mention that the welded pipe market is picking up again, and some movement in demand is observed especially in Saudi Arabia and the UAE. The business of Saudi Arabian state oil company Aramco is picking up and it is actively resuming projects. Welded pipe producers say they are seeing a positive mood from national oil companies in the Middle East and North Africa. More projects are expected in 2010. Welded pipe producers expect their sales volumes to increase in 2010 and expect this increase to be reflected in their results. Up to the end of this year welded pipe prices from Saudi Arabian producers should be stable, as raw material costs are also likely to follow a stable trend. However, many market players think that quotations for welded pipes may go up at the beginning of 2010 due to increased iron ore prices and the expected growth in demand. Yet, stiff competition is predicted, and this may have a limiting effect on price increases.
Current offers from Saudi Arabia's commercial producers for 2"-8" welded pipes grade A, B as per ASTM A53/API 5L are at $800-850/mt ex-works (here and below on a theoretical weight basis), and even lower in some cases depending on the competition. Quality Saudi Arabian manufacturers approved by state-owned national oil company Saudi Aramco are offering 6"-16" welded steel pipes grade B as per API 5L with plain ends at around $850-950/mt ex-works. Export quotations of 6"-16" welded steel pipes grade B made to API 5L from quality producers are at $900-1,000/mt FOB. Commercial manufacturers are offering 2"-8" welded pipes grade A, B as per ASTM A53/API 5L to the external market at around $780-820/mt FOB.
In the import segment, prices for welded pipes from foreign suppliers have dropped by $10-70/mt over the period of review. Offers of Chinese ERW pipes up to 10" grade B as per ASTM A53/API 5L are being given to the Saudi market at $660-700/mt C&F, compared to $660-720/mt C&F one month ago.
South Korean ERW pipes up to 16" grade B made to ASTM A53/API 5L are currently being offered to Saudi Arabia at around $800-820/mt C&F, $10-30/mt lower than one month ago.
Indian suppliers are offering ERW pipes up to 6" as per BS 1387 (light series) at the level of $740-760/mt C&F Saudi Arabia, $40-70/mt lower than one month ago.