Chinese seamless pipe producers try to raise export offers

Despite a slight rise in round billet prices in China, the domestic seamless pipe market has been generally stable in the past two weeks. Thus, most mills from the eastern part of China have increased their prices of round billets by RMB 50/mt ($8/mt), giving offers at RMB 5,200-5,220/mt ($660-690/mt) ex-works with 17 percent VAT for August delivery. However, domestic seamless pipe quotations have stayed unchanged over the past two weeks, while export prices of Chinese seamless pipes have increased by $35-50/mt over the same period. Nevertheless, according to market sources, this export price growth does not have any support from foreign buyers amid the seasonal lull in buying activity. Market insiders believe that the construction of affordable housing and water conservation projects, the elimination of backward steel output capacity, the boom in fixed assets investment and the demand for urbanization will provide strong support for the upward movement of the seamless pipe market at a later period. However, the seamless pipe market may remain gloomy until the end of August amid the continuing seasonal downturn in demand from local and foreign buyers.
 
Chinese domestic prices of 2"-8" seamless pipes according to GB/8163 are varying at around RMB 5,800-5,850/mt ($900-910/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 6,500-6,650/mt ($1,010-1,030/mt) ex-works.
 
According to the China Iron and Steel Association (CISA), in June this year China produced 2.401 million mt of seamless pipes, more than May's 2.231 million mt and marking an increase of 13.8 percent year on year. Total production for the first six months of this year was 12.695 million mt, up 12.4 percent over the same period last year.
 
Current export offers of seamless pipes from Chinese manufacturers for 2"-6" Sch 40 and Sch 80 grade B material according to ASTM A106/ASTM A53 are on average at $910-995/mt FOB, while 8"-12" seamless pipes are at about $920-1,030/mt FOB. Chinese 2"-6" seamless pipes made to ASTM A106/ASTM A53/API 5L are quoted at around $950-1,050/mt FOB.
 
Export offers of Chinese seamless pipes with diameter 33.7-48.3 mm made of St.35.8, 37 grade according to DIN 2448 are in the range of $970-1,060/mt FOB.
 
Export quotations for 4 ½"-13 3/8" casing J55 as per API 5CT, plain ends, are at $1,100-1,150/mt FOB, while 2 7/8"-3 1/2" tubing, plain ends, are at around $1,150-1,200/mt FOB.
 
According to the China Iron and Steel Association (CISA), China exported 389,129 mt of seamless pipes in June, indicating an increase of 3.5 percent from the May level but down 0.9 percent year on year. Exports of seamless pipes from China in the first six months of 2011 reached 2.144 million mt, up 21.6 percent on the corresponding period of 2010.