Despite the stability of round billet prices and weak market demand, Chinese suppliers of seamless pipes have increased their domestic and export quotations in order to the change the downward direction of prices and in the hope of rousing buyers. Over the past two weeks most Chinese pipe mills have raised their domestic quotations, by an average of RMB 250-350/mt ($40-50/mt). Meanwhile, export prices have risen by $10-20/mt during the period in question.
Chinese domestic prices of seamless pipes, 2"-6" grade B according to ASTM A106 or GB/8163, are currently varying at around RMB 4,500-4,850/mt ($660-710/mt) ex-works, compared to RMB 4,250-4,500/mt ($620-660/mt) ex-works two weeks ago. These prices for the local market include 17 percent VAT and are on actual weight basis. Domestic quotations of tubing pipes of 2"-4" size, grade J55 as per API 5CT, plain-ended, are at about RMB 4,800-5,200/mt ($700-760/mt) ex-works. Chinese domestic prices for casing, 6"-8" grade J55 according to API 5CT, are varying at around RMB 4,600-5,000/mt ($675-730/mt) ex-works.
Current export offers of seamless pipes from Chinese manufacturers for 2"-6" grade B material according to ASTM A106/API 5L are on average at $650-690/mt FOB, while 1"-1 ½" pipe sizes are at $690-720/mt FOB, with ½"-3/4" pipe sizes at $760-850/mt FOB. Export quotations for 2"-4" tubing J55 as per API 5CT, plain ends, are in the range of $720-770/mt FOB, while quotations for 6"-8" casing are at $700-750/mt FOB.
China's seamless steel pipe production has been declining throughout 2009. In September the output figure was 1.77 million mt, 7.7 percent lower than in September 2008 and 36.8 percent lower than in August this year. Seamless pipe production in China in January-September this year totaled 15.45 million mt, down 0.8 percent year on year. The major reason behind the shrinking monthly output is the insufficient demand both at home and in the overseas markets.
According to data from the China Iron and Steel Association (CISA), in September exports of seamless pipes from China totaled 286,603 mt, up 20 percent from the previous month. However, some Chinese seamless steel pipe enterprises are still facing severe challenges due to the inadequate increase in exports and poor domestic market demand.
Taking a look at the global market, some countries have put forward measures to ease the financial crisis, and economies have warmed up slightly in major countries like the US and others. Meanwhile, many countries have launched a series of antidumping duties against Chinese steel products. Internally, China's domestic economy has shown signs of a rebound on the back of increased demand driven by government policy, but still faces uncertainties which pose further challenges to enterprises in China.