The welded pipe market in the UAE continues to be quiet, with welded pipe prices continuing to trend in a downward direction. Thus, domestic quotations of black and galvanized welded pipes have declined by $20/mt over the past month because of weak buying activity and the impending religious holidays. Welded pipe suppliers from South Korea have decreased their offer prices for the UAE by $50/mt over the past month, quotations of Indian ERW pipes have dropped by $50-80/mt, while Chinese quotations have increased by $10/mt over the same period.
In particular, domestic prices for locally produced 1"-6" welded pipes with 2-4 mm wall thickness grade B made to ASTM A53 or BS 1387 are at about $650-680/mt ex-works, while ½"-¾" pipe sizes with 1.8-2.0 mm wall thickness are at $660-700/mt ex-works. Galvanized pipes of 1"-4" size as per BS 1387 are quoted at about $740-760/mt ex-works.
Offers of Chinese ERW pipes up to 10" grade B as per ASTM A53/API 5L are being given to the UAE market at $700-730/mt C&F, compared to $690-720/mt C&F one month ago.
Indian suppliers are offering ERW pipes 1"- 10" as per BS 1387 (light series) or API 5L at $700-750/mt C&F, against $780-800/mt one month ago.
South Korean ERW pipes 18"-20" grade B made to ASTM A53/API 5L are currently being offered to the UAE at around $750/mt C&F, compared to $800-820/mt one month ago. Offers of similar 26"-28" ERW pipes are being given on average at $900/mt C&F. Quotations of 26"-32" SAW pipes from South Korea are at $1,050-1,100/mt C&F.
The global financial crisis that swept into the UAE last year not only put an end to a construction boom but saddled the country with $80 billion of debt. Abu Dhabi is limiting construction to avoid the housing glut and price declines that hit the real estate market in neighboring Dubai. Abu Dhabi home prices have dropped by an average of 33 percent from their peak in the third quarter of 2008. Dubai's residential property values have fallen by more than 50 percent. Slowing down construction was easier in Abu Dhabi than in Dubai because more projects were in the planning stage when the financial crisis hit and, therefore, were easier to postpone. A housing shortage in Abu Dhabi will not help lift prices because residents can commute from Dubai, which has an oversupply. Due to reduced property prices there are not too many construction projects in the UAE. Market players do not expect any demand improvement in December. However, welded pipe prices may stabilize after the holidays. The revival of buying activity in the welded pipe market is not expected before 2010.