During the past week ending May 5, the Chinese steel pipe market has generally been following an upward trend. In China's three main steel markets, i.e., Shanghai, Guangzhou and Beijing, the average price of 20# (GB/T8162-1999) grade 108 mm x 4.5 mm seamless pipe now stands at $911/mt, with 20# (GB/T8163-1999) grade 219 mm x 6 mm seamless pipe at $922/mt, and Q195-215 grade 48 mm x 3.25 mm welded pipe prices at $783/mt and Q215-235 grade 114 mm x 3.75 mm welded pipe prices at $777/mt. All the above prices include 17 percent VAT.
Demand for Chinese seamless pipe on the low side
In eastern China, seamless pipe prices have continued to maintain a slight upward trend, up approximately $7/mt week on week. It is observed that seamless pipe demand has remained at low levels due to the slow recovery of demand in the market. The prices in southern China show an uptrend due to the increases in raw material prices. However, traders are facing difficulties in relation to getting price levels accepted in the markets. At the same time, in China's northern regions the lack of sufficient strength of seamless pipe demand from buyers raises questions as to how long the current increases in pipe prices will last.
Welded pipe price rise in China supported by raw material uptrend
In the eastern parts of China, amid the increases of raw material prices, we see that Chinese producers are allowing a controlled rise of welded pipe prices. Inventory levels in the welded pipe market are not too high. In southern China, producers are likely to increase welded pipe prices by approximately $3-7/mt. However, suppliers are having difficulty in giving offers due to the increasing strength of costs and against the declining demand from buyers. In the northern areas of China, the uncertainty of government policy on electricity rationing plays a positive role in the market, while the continuous price uptrend also needs to be supported by demand from downstream buyers. It remains to be seen how buyers will react to the expected welded pipe price increases.