Activity in Saudi Arabia's welded pipe market remains strong despite somewhat weaker demand from consuming industries caused by a crackdown on illegal workers. A regional manufacturer of welded steel pipe, Saudi Steel Pipe (SSP), has reported a higher net profit for the first quarter this year thanks to an increase in delivery for projects of state-owned oil company Saudi Aramco. Earlier this month, SSP signed a contract worth SAR 227 million ($60.5 million) to supply welded steel pipes for oil and gas wells to Saudi Aramco. However, quotations of locally produced welded pipes have declined by $20-30/mt over the past month amid the global downward trend and the weakening import offers of Chinese material. Demand for welded pipes in Saudi Arabia is expected to stay firm thanks to a number of government-supported infrastructure and construction projects. However, Saudi buyers may be reluctant to conclude transactions for large tonnages in view of the decreasing price trend in the global market.
Quality Saudi Arabian manufacturers, approved by Saudi Aramco, are offering 6"-10" welded steel pipes grade B as per API 5L with plain ends at around $950-970/mt ex-works on theoretical weight basis.
Current offers from Saudi Arabian commercial producers for 2"-8" ERW pipes grade A, B as per ASTM A53 are being given to the domestic market at $880-920/mt delivered on theoretical weight basis.
Export quotations from Saudi Arabia of 6"-10" welded steel pipes grade B made to API 5L from quality producers are at $1,000-1,020/mt FOB, while export offers of 2"-8" ERW pipes from Saudi commercial producers are at $900-940/mt FOB.
Import offers of Chinese welded pipes of 2"-6" grade B made to ASTM A106/API 5L are being given to the local Saudi market at around $720-770/mt CFR, compared to $740-780/mt CFR at the end of March.