Chinese seamless pipe prices start to rise

Seamless pipe quotations in China have started to rise amid bullish expectation for raw materials. Over the past two weeks, domestic quotations of Chinese seamless pipes made to ASTM A106/API 5L have increased by RMB 400-500/mt ($65-80/mt, currency fluctuations taken into account), while domestic prices of pipes made to GB/8163 have remained unchanged. Export offers of Chinese seamless pipes have gone up by $50/mt over the period under review. Currently, locally produced round billets are being offered to the Chinese market at around RMB 5,100-5,200/mt ($780-795/mt), down by RMB 200-300/mt ($25-40/mt) over the past month. At the same time market insiders report that round billet prices have started to move up slowly in some regions of the country. Although oil drilling activity is improving gradually in the international market, trade restrictions in Europe and the US as well as political instability in the Middle East and North Africa are expected to slow down exports of seamless pipes from China. However, demand for seamless pipes in the domestic market is recovering gradually. Seamless pipe suppliers expect to see a further rise in prices in April due to better demand and anticipated higher quotations of round billets in view of upward trend in iron ore prices.
 
Chinese domestic prices of 2"-8" seamless pipes according to GB/8163 are varying at around RMB 5,800-5,900/mt ($885-900/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 6,400-7,000/mt ($980-1,070/mt) ex-works.
 
Current export offers of seamless pipes from Chinese manufacturers for 1"-8" grade B material according to ASTM A106/ASTM A53 are on average at $980-1,050/mt FOB. Export quotations for 2"-4" tubing J55 as per API 5CT, plain ends, are in the range of $1,200-1,250/mt FOB, while quotations for 6"-8" casing are at $1,100-1,150/mt FOB.