China’s welded pipe prices still stable but expected to rise soon

The welded pipe market in China is still quiet. Chinese welded pipe producers are keeping their offers relatively stable as most market players have not yet resumed activity after the Spring Festival holiday. Thus, over the past three weeks domestic and export quotations of Chinese welded pipes have remained unchanged. Meanwhile, major Chinese steel mills have raised their steel prices for three straight months owing to continuously rising raw material costs. In particular, major domestic steelmaker Baosteel raised its prices for hot rolled products for March delivery by RMB 300/mt compared to its prices for February delivery.  At the same time, welded pipe demand from local customers is predicted to recover in spring, in particular from the automobile and construction sectors. Market players are also optimistic on the prospects for stronger buying activity from foreign consumers. In the above overall context, it is expected that welded pipe prices in China will start to rise soon pushed by higher raw material costs, rising inflationary pressure and the optimistic market outlook.
 
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the Chinese domestic market at an average of RMB 4,800-5,100/mt ($730-775/mt) ex-works, while 2"-6" welded pipes of grade B as per ASTM A53 are at RMB 5,300-5,600/mt ($805-850/mt) ex-works. These local market welded pipe prices include 17 percent VAT.
 
According to the China Iron and Steel Association (CISA), in December China produced 3.241 million mt of welded pipes, more than November's 3.17 million mt but marking a decrease of 10.7 percent year on year. Meanwhile, China's welded pipe production in 2010 reached 32.4 million mt, up 6.5 percent compared to 2009.
 
Current export prices of Chinese welded pipes, 2"-6" grade B according to ASTM A53, are varying at around $780-850/mt FOB on actual weight basis.