China's profile makers show strong export urge

SteelOrbis Shanghai 2006 was an important year for China's steel pipes and tubes exports. Regarding square and rectangular pipe, some domestic makers estimate that the increase in exports compared with 2005 will be around 60%-80%, or even more. Taking a look at the domestic market, we see that some makers are using their full capacity and are even considering the addition of new production lines. Meanwhile, many other makers are just using about 60 percent of their capacity. According to some tube makers, with steel structure production having started only a few years ago in China, domestic consumption is not great even though a bright future has been predicted for the long term. On the contrary, demand for square and rectangular pipe in the foreign market is much bigger. Especially as regards big sizes, there are opportunities for China's mills. This is due to their improved production technology and the large overseas market consumption . Currently, China's manufacturers mainly export square and rectangular pipes to America, Europe, the Middle East. Pipe prices saw a continuous drop recently in the US market. Especially on the West Coast, the ex-factory prices of some local pipe mills dropped about 100USD/mt, which led to a greater sensitivity to imported pipe prices. At the same time, South Korea is also speeding up tube exports to the US. Since they have increased their imports of raw material from China, their price has become more competitive. As a result, more and more Chinese tube makers are showing a strong desire to export to Europe. Besides Spain and Italy (destinations to which they already export), the Chinese manufacturers also hope to export to UK, Ireland, Belgium, Sweden and other European countries.