Despite the upward trend in the Chinese hot rolled market, local producers of welded pipes have kept their quotations for Chinese customers stable over the past two weeks. Export prices of welded pipes have increased in some cases by a maximum of $30/mt during the period in question. Meanwhile, pipe producers are very careful not to increase prices by strong margins, whether for the domestic or export markets, as they fear this could lead to lower sales. At the same time, the bottom end of stockists' quotations for the domestic market has risen by RMB 140/mt ($20/mt) over the past two weeks.
Although demand in both the domestic and international markets is still weak, it will not be enough for welded pipes producers just to keep their prices unchanged in order to avoid losses, since the prices for feedstock material have increased. If the prices for flat products continue to rise, then the welded pipe producers will also be obliged to raise their prices. Nevertheless, the producers are hoping that China's hot rolled market will be unable to maintain its climbing trend in the coming period due to high inventory.
Current export prices of Chinese ERW pipes, 2"-6" grade B according to ASTM A53/API 5L, are at about $630-660/mt FOB.
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the domestic market at the same level as two weeks ago, at RMB 4,300-4,600/mt ($630-675/mt) ex-works. These local market prices include 17 percent VAT and are on actual weight basis.
Traders are offering ERW pipes in 1½"-4" sizes, of Q235B steel grade made to Chinese GB standard, at RMB 3,650-4,000/mt ($535-585/mt) ex-stock, compared to RMB 3,510-4,000/mt ($515-585/mt) ex-stock two weeks ago.