Domestic prices of Chinese seamless pipes continued to decline during the first week following our last report dated September 3, by a minimum of RMB 200/mt ($30/mt) compared with the September 3 levels. Meanwhile, export quotations of seamless line pipes from Chinese manufacturers decreased by $30-40/mt during the same week. However, during the last two weeks Chinese seamless pipe prices have remained stable, though current market demand is still weak. The Chinese mills do not want to decrease prices at the present time since it appears that any prices cuts will not help to increase sales. Also, the stability of round billet prices in the Chinese market has helped to stop the fluctuations of seamless pipe prices.
Chinese domestic prices of seamless pipes, 2"-6" grade B according to ASTM A106 or GB/8163, are currently varying at around RMB 4,700-4,750/mt ($690-695/mt) ex-works, compared to RMB 4,900-5,500/mt ($720-805/mt) ex-works three weeks ago. These local market prices include 17 percent VAT and are on actual weight basis.
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 $660-720/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, both for September production material.
A lack of strong demand is still observed in the local Chinese seamless pipe market and it seems that any seamless pipe price increase will not receive support in the short term. At the same time, however, the investments of the Chinese government to stimulate economic growth may help to improve the current market situation.