Seamless pipe market in Saudi Arabia about to enter seasonal lull

Friday, 18 June 2010 14:02:28 (GMT+3)   |  
       

Over the past few years seamless pipe consumption in Saudi Arabia has surged rapidly on the back of the boom in construction, growing investment in real estate, and cheap and reliable supplies of gas or energy. In the coming two months, the demand for seamless pipes may decline due to the usual slump in buying activity in the summer. Foreign suppliers will likely to lower prices for seamless pipes. However, the general sentiment for the seamless pipe market in Saudi Arabia is optimistic enough because of the large potential of the market. It is expected that rapid economic development will lead to growth in the construction and infrastructure sectors, which will boost steel demand in the Kingdom.

Chinese suppliers have decreased their seamless pipe prices for Saudi Arabia by $80/mt over the past month. Ukrainian suppliers have cut their seamless pipe offers for Saudi Arabia by $50-70/mt over the period under review, while quotations of South African seamless pipes have declined by $100/mt. Seamless pipe offers from top-tier Japanese producer Sumitomo have decreased by $100/mt over the past month.

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 $850-900/mt C&F.

Quotations of Ukrainian seamless pipes (Interpipe) 2"-14" grade B made to ASTM A106/API 5L are at $1,050-1,080/mt C&F. Russian seamless pipes 3"-8" grade B as per ASTM A106/API 5L are being offered to the Saudi market at $1,000-1,035/mt C&F.

Quotations of 2"-6" seamless pipes from South Africa (ArcelorMittal) grade B as per API 5L are at about $1,000-1,050/mt C&F.

Quotations of seamless pipes to Saudi Arabia from Japan (Sumitomo) for 2"-8" grade B made to ASTM A106/API 5L are varying at about $1,300-1,350/mt C&F.

At present, the seamless pipe market in Saudi Arabia is to a very large degree oriented towards imports. However, it is expected that the share of imported seamless pipes will decline in the coming years in line with increased local production of seamless pipes. The first seamless pipe mill in Saudi Arabia, Jubail Energy Services Company (JESCO), is expected to reach full capacity in 2011. Currently JESCO continues to expand production at its new pipe rolling mill which was commissioned in October 2009.


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