Chinese seamless pipe producers have lowered their domestic and export prices under pressure from the significant declines in the overall steel market and in line with the large decline in round billet prices. Steel prices in China are unlikely to see a repeat of their previous strong upward surges in the near future given so many current uncertainties, including regulation of the domestic real estate sector. A revival seems unlikely in the coming weeks as international sentiments have also mellowed owing to the completion of stock replenishment in most quarters, while buyers are becoming circumspect given the declines in scrap and iron ore prices. Over the past two weeks domestic quotations of seamless pipes have sunk by RMB 500-600/mt ($70-85/mt), while export prices have fallen by $30-60/mt.
In April this year China produced 2.119 million mt of seamless pipes, 26.9 percent higher than in April 2009. Total production for the first four months of this year was 7.385 million mt, up 11.5 percent over the same period last year. Market insiders believe that the current declining price movement will not end until pipemakers cut their production.
Chinese domestic prices of seamless pipes, 2"-6" grade B according to ASTM A106 or GB/8163, are varying at around RMB 5,500-6,000/mt ($805-880/mt) ex-works, including 17 percent VAT.
Сurrent export offers of seamless pipes from Chinese manufacturers for 2"-6" grade B material according to ASTM A106/API 5L are on average at $810-890/mt FOB, while 10"-16" pipes are at $880-910/mt FOB. Export quotations for 2"-4" tubing J55 as per API 5CT, plain ends, are in the range of $1,100-1,150/mt FOB, while quotations for 6"-8" casing are at $950-1,000/mt FOB.