The downward trend has continued in the Chinese seamless pipe market owing to the lack of actual transactions and weak real demand, high inventory and oversupply. Over the past two weeks, domestic prices for Chinese seamless pipes have decreased by RMB 200/mt ($30/mt) amid the downward trend in the Chinese steel market. At the same time, export quotations of seamless pipes from China have decreased by $20-50/mt over the period under review. In the overseas markets, seamless pipe supplies have exceeded demand, leading to lower demand and prices for Chinese material. Local market players remain cautious as higher input prices continue to work through the business and demand remains muted. Chinese traders are trying to keep their prices stable and are not anxious to restock in the current unclear market situation. In November, transaction activity may even slow down as some projects are going to be affected by the colder weather. The recent credit adjustment and rate hike will both have a definite effect on overall demand and on confidence levels in the market. Considering all these factors, a sharp rise in prices is unlikely in the coming short-term period while round billet prices remain firm.
Chinese domestic prices of seamless pipes, 2"-8" grade B according to ASTM A106 or GB/8163, are varying at around RMB 5,400-5,600/mt ($810-840/mt) ex-works, including 17 percent VAT.
According to the China Iron and Steel Association (CISA), in September this year China produced 2.14 million mt of seamless pipes, less than August's 2.25 million mt, but marking an increase of 20.9 percent year on year. Total production for the first nine months of this year was 18.6 million mt, up 18.8 percent over the same period last year.
Current export offers of seamless pipes from Chinese manufacturers for 2"-12" grade B material according to ASTM A106/ASTM A53 are on average at $815-870/mt FOB, while 14"-18" pipes are at $835-900/mt FOB. Export quotations of 1" seamless pipes of grade B made to ASTM A106 are at $880-950/mt FOB, while prices of ½"-3/4" pipes are at $950-1,100/mt FOB.
Export quotations for 2"-4" tubing J55 as per API 5CT, plain ends, are in the range of $900-1,000/mt FOB, while quotations for 6"-8" casing are at $880-950/mt FOB.
According to the China Iron and Steel Association (CISA), China exported 331,055 mt of seamless pipes in September, indicating a decrease of 2.4 percent from the August level but up 15.5 percent year on year. Exports of seamless pipes from China for the first nine months of this year reached 2.8 million mt, up 18.5 percent on the corresponding period of last year. China's seamless pipe exports are expected to drop in the coming months because of the stronger Chinese currency and weak international demand.