Chinese seamless pipe prices have started to soften due to uncertain demand and the decline in round billet prices. In particular, locally produced round billets are currently being offered to the Chinese market at around RMB 5,400/mt ($820/mt), down by RMB 100/mt ($15/mt) over the past three weeks. Over the past two weeks, domestic quotations of Chinese seamless pipes have decreased by RMB 50-100/mt ($5-10/mt, currency fluctuations taken into account). Export offers of Chinese seamless pipes have declined by $10-35/mt over the period under review, while export prices for casing and tubing have remained unchanged. Market players expect that the sluggish market and difficulties in obtaining loans will cause traders to sell at lower prices and to reduce their order volumes in the coming short-term period.
On the other hand, market sources inform SteelOrbic that seamless pipe makers in China will likely follow the upward price policy of Japanese steelmaker Nippon Steel Corporation, which is seeking a 25 percent price hike after April to cover surging input costs. At the same time, market participants are confident that demand for Chinese seamless pipes will rise this year boosted by the energy sectors, especially by rising oil and gas drilling activities and large investments in clean energy. Thus, seamless pipe prices in China are likely to remain high in 2011 due to soaring raw material costs.
Chinese domestic prices of 2"-8" seamless pipes according to GB/8163 are varying at around RMB 6,000-6,050/mt ($915-920/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 6,100-6,600/mt ($930-1,010/mt) ex-works.
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 $950-1,050/mt FOB, depending on producer. Export quotations for 2"-4" tubing J55 as per API 5CT, plain ends, are in the range of $1,150-1,200/mt FOB, while quotations for 6"-8" casing are at $1,050-1,100/mt FOB.
According to the China Iron and Steel Association (CISA), China exported 357,793 mt of seamless pipes in January this year, indicating an increase of 0.9 percent from the December level and up 37.2 percent year on year. China's seamless pipe exports are likely to rise this year. However, due to the loss of the US and European markets through trade restrictions, exports of seamless pipes from China will not reach pre-crisis levels and will be lower than in 2008.