Over the past two weeks welded pipe prices in China have decreased in line with prices for flat products and limited demand. Domestic prices of Chinese welded pipes have decreased by RMB 100/mt ($10-15/mt) over the past two weeks, while export quotations have moved down by $20-30/mt. Most market players do not expect any improvement in the market in the coming period. Growth in iron ore prices has considerably squeezed the profit margins of steel producers in China. Owing to sluggish demand and the impossibility of capacity reductions by the mills in the short term, inventory pressure is still expected to be huge in the future. Meanwhile, it should be noted that China is going to close down steel capacities amounting to millions of metric tons under a three-year plan which started last year in order to reduce overcapacity and cut down pollution.
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the domestic market at an average of RMB 4,900-5,200/mt ($720-760/mt) ex-works, compared to RMB 5,000-5,300/mt ($730-775/mt) ex-works two weeks ago. These local market prices include 17 percent VAT.
Current export prices of Chinese welded pipes, 2"-6" grade B according to ASTM A53/API 5L, are varying at around $730-770/mt FOB on actual weight basis, compared to $750-800/mt FOB two weeks ago. According to the China Iron and Steel Association (CISA), in April China exported 225,360 mt of welded pipes, indicating an increase of 24.91 percent on the March level and up 10.5 percent year on year. China's total welded pipe exports in the first four months of this year reached 782,590 mt, down 18.23 percent year on year.