The iron ore negotiations have continued to boost Chinese welded pipe prices over the past two weeks, though the gains are slightly less than in the previous two weeks. Welded pipe producers in China have raised their quotations by maximum of RMB 300/mt ($40/mt) for local customers and by $20-50/mt for foreign consumers. The iron ore negotiations constitute the most powerful driving force behind the price increases. However, in addition, leading Chinese steelmaker Baosteel has announced an increase of RMB 300/mt ($40/mt) in its HR prices for April production. Welded pipe prices in the Chinese market are likely to go up further in the coming period, considering the rising costs and the improving demand in the domestic market.
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the domestic market at an average of RMB 5,000-5,200/mt ($730-760/mt) ex-works, compared to RMB 4,700-5,200/mt ($690-760/mt) ex-works two weeks ago. These local market prices include 17 percent VAT.
According to the China Iron and Steel Association (CISA), in February China produced 1.614 million mt of welded pipes, less than January's 2.421 million mt and marking a decrease of 7.8 percent year on year. Meanwhile, China's welded pipe production in the first two months of this year reached 4.035 million mt, up 20.4 percent on the corresponding period of last year.
Export demand remains precarious. At the moment the strongest export markets for Chinese welded pipes are Australia, the Philippines, Angola, Singapore and Indonesia. Current export prices of Chinese welded pipes, 2"-8" grade B according to ASTM A53/API 5L, are varying at around $760-800/mt FOB, compared to $710-780/mt FOB two weeks ago. According to the CISA, in February China exported 180,500 mt of welded pipes, indicating a decrease of eight percent on the January level and down 11.4 percent year on year.