Despite the rising prices for flat steel in China, welded pipe producers have maintained their domestic and export quotations at the levels of two weeks ago as demand still remains seasonally weak. The biggest Chinese steelmaker Baosteel has raised its HR coil prices for February deliveries by RMB 100/mt compared to January levels, basically in line with market expectations. The main reasons for the price hikes are rising raw material prices and the good future outlook for downstream demand. Welded pipe prices in China are likely to maintain an upward trend in the first quarter of 2011 as major steelmakers are expected to follow the example of Baosteel's price increase for February, though perhaps with smaller increase margins. Market players foresee a very good market outlook for welded pipes after the Spring Festival. However, welded pipe traders are keeping their inventories at low levels and are maintaining a cautious approach to restocking until the market trend becomes clearer.
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 4,600-4,900/mt ($695-740/mt) ex-works, while 2"-6" welded pipes of grade B as per ASTM A53 are at RMB 5,100-5,400/mt ($770-820/mt) ex-works. These local market welded pipe prices include 17 percent VAT.
Current export prices of Chinese welded pipes, 2"-6" grade B according to ASTM A53, are varying at around $750-830/mt FOB on actual weight basis.