Demand for seamless pipes in the local Chinese market is still witnessing a weak trend impacted by the central government's tight monetary policy. Foreign customers show little interest in purchases of Chinese material, and buyers remain worried over the global economic uncertainties. Over the past two weeks, Chinese suppliers have maintained their domestic and export offers of seamless line pipes mainly stable amid poor demand and flat quotations of round billets. In particular, quotations of round billets are at the level of RMB 5,100-5,250/mt ($800-820/mt) ex-works, including 17 percent VAT, compared to RMB 5,150-5,250/mt ($805-820/mt) ex-works two weeks ago. However, market insiders report that some improvement are seen in the OCTG sector, and export prices of OCTG casing and tubing have increased by a maximum of $20/mt over the past two weeks. Though market participants are still expecting better demand in the coming period due to a traditional seasonal upturn, the tightening liquidity and inflation pressure will likely slow down China's economic growth, and the growing European financial crisis will depress seamless pipe exports from China. The price trend is expected to fluctuate in the near future in line with the demand level and the cost of round billets.
Chinese domestic prices of 2"-8" seamless pipes according to GB/8163 are varying at around RMB 5,800-5,850/mt ($910-915/mt) ex-works, including 17 percent VAT. Domestic prices of seamless pipes, 2"-6" grade B as per ASTM A106/API 5L, are at around RMB 6,450-6,650/mt ($1,010-1,040/mt) ex-works.
According to the China Iron and Steel Association (CISA), in August this year China produced 2.326 million mt of seamless pipes, more than July's 2.318 million mt and marking an increase of 6.9 percent year on year. Total production for the first eight months of this year was 17.331 million mt, up 11.2 percent over the same period last year.
Current export offers of seamless pipes from Chinese manufacturers for 1"-8" grade B material according to ASTM A106/ASTM A53/API 5L are on average at $980-1,030/mt FOB, while 10"-24" seamless pipes are at about $980-1,080/mt FOB.
Export quotations for 4 ½"-13 3/8" casing, J55 as per API 5CT, plain ends, are at $1,120-1,150/mt FOB, while 2 7/8"-3 1/2" tubing, plain ends, are at around $1,170-1,200/mt FOB.