Chinese seamless pipe producers have over the past month decreased their offer prices for both the domestic and export markets due to weak demand, by RMB 100-150/mt ($10-25/mt) and $20-40/mt respectively. Demand in the domestic market is not sufficient to consume all locally produced seamless pipes. Meanwhile, interest from foreign customers in Chinese seamless pipes remains sluggish. There are almost no inquiries from Europe and the US due to the huge inventories in these regions, with most inquiries currently coming from Southeast Asia. With production remaining at high levels and exports plummeting, the Chinese domestic market remains firmly on course for a scenario of excess supplies.
Chinese domestic prices of seamless pipes, 2"-6" grade B according to ASTM A106 or GB/8163, are varying at around RMB 4,900-5,500/mt ($720-805/mt) ex-works, compared to RMB 5,000-5,650/mt ($730-830/mt) ex-works one month ago. These local market prices include 17 percent VAT. Offers of 6"-8" casing J55 grade as per API 5CT are being given to the domestic market at RMB 5,300-5,800/mt ex-works. Export prices for 2"-4" tubing pipes of J55 grade as per API 5CT are about RMB 5,500-5,800/mt ex-works.
Meanwhile, 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 $700-750/mt FOB. Export quotations for 2"-4" tubing J55 as per API 5CT, plain ends, are in the range of $760-800/mt FOB, while quotations for 6"-8" casing are at $750-800/mt FOB for September production material.
It is difficult to foresee when the market will recover as so far there is no solid evidence pointing towards a recovery. Chinese seamless pipe producers are pessimistic as regards the prospects for an improvement in the market in the short term. Pipe prices in China are likely to remain depressed due to overcapacity and low demand levels.