Buying activity is picking up gradually in the Saudi Arabian seamless pipe market in line with the recovery of the country's economy. The prospects for next year appear to be very bright and market insiders expect to see higher demand for seamless pipes from January onward. Yet, the price policies of foreign seamless line pipe suppliers continue to indicate a variety of trends. Offer prices from top-tier European mills have decreased by $50-100/mt over the past month. Import quotations of seamless pipes from Romania and South Africa have dropped by $100/mt. At the same time, Ukrainian and Russian mills have maintained their offers for Saudi Arabia at the previous levels. Import prices of seamless pipes from China have increased by $20-40/mt over the period under review.
In particular, offers of Chinese seamless pipes 2"-6" grade B made to ASTM A106/API 5L are being given to the Saudi Arabian market at $740-770/mt C&F.
Quotations of Ukrainian seamless pipes (Interpipe) 2"-6" grade B made to ASTM A106/API 5L are at $900-940/mt C&F, while 10"-12" pipes are priced at around $980-1,000/mt C&F.
Russian seamless pipe offers to Saudi Arabia from TMK subsidiary Volzhsky Pipe Plant are in a range of $950-1,000/mt C&F for material under 8" grade B made to ASTM A106/API 5L, while 10"-16" seamless pipes can be heard at a maximum of $1,050-1,100/mt C&F.
Romanian and South African seamless pipes (ArcelorMittal) 2"-10" grade B made to API 5L are quoted at around $1,000-1,100/mt C&F Saudi Arabia.
Quotations of seamless pipes to Saudi Arabia from Italy and Argentina (Tenaris) and from Japan (Sumitomo) for 2"-6" grade B made to ASTM A106/API 5L are varying at about $1,200-1,250/mt C&F.
Following two years of sharp declines, world oil demand is expected to return to growth in 2010. Fundamentals will continue to be weak in the first half of the year before improving in the second half. Saudi Arabia's economic conditions are beginning to improve as higher oil prices boost export revenues and private sector confidence.
Saudi Aramco, the world's biggest oil company, plans to drill 45 to 50 oil exploration wells next year. Aramco is currently exploring in every corner of the kingdom. Its exploration is spread evenly in the Rub al Khali, in northwestern Saudi Arabia, in the Gulf area, and in existing operational areas too. The company has described its exploration program in Saudi Arabia as very active and very successful. All these factors will push up the demand for seamless line pipes and OCTG in the coming year.