Welded pipe manufacturers in China have maintained their domestic prices steady over the past two weeks, while export prices have dropped by just $10-20/mt. Welded pipe producers did not make any significant change to their quotations in anticipation of the results of the monthly meeting of major flats producers in China. The recent government announcement of the cancellation of the export tax rebate for certain steel products will have a negative impact on the domestic steel market, as it will make steel exports more difficult and will consequently result in an increase in supplies in the domestic market. At the same time, a sharp decline in HRC prices is impossible because the market has almost approached the bottom. Welded pipe producers in China will likely adopt a watching attitude and will decide how to respond in accordance with the changing market situation. Nevertheless, the general market sentiment is pessimistic because of the current macroeconomic situation and waning demand from both domestic and foreign customers.
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the domestic market at an average of RMB 4,800-5,100/mt ($700-745/mt) ex-works. These local market prices include 17 percent VAT.
According to the China Iron and Steel Association (CISA), in May China produced 2.774 million mt of welded pipes, less than April's 2.934 million mt and marking an increase of 1.2 percent year on year. Meanwhile, China's welded pipe production in the first five months of this year reached 12.617 million mt, up 14 percent on the corresponding period of last year.
Current export prices of Chinese welded pipes, 2"-6" grade B according to ASTM A53/API 5L, are varying at around $720-750/mt FOB on actual weight basis. According to the CISA, in May China exported 271,992 mt of welded pipes, indicating an increase of 20.7 percent on the April level and up 65.1 percent year on year. China's total welded pipe exports in the first five months of this year reached 1.0546 million mt, down six percent year on year.