Chinese steel pipe market softens further amid overall sluggishness

China's domestic steel pipe market has continued to follow an overall soft trend in the past week against a background of sluggish demand.
 
As of May 23, in China's three main steel markets, i.e., Shanghai, Guangzhou and Beijing, the average price of 20# (GB/T8162-1999) grade 108 mm x 4.5 mm seamless pipe stands at $703/mt, with 20# (GB/T8163-1999) grade 219 mm x 6 mm seamless pipe at $719/mt. Meanwhile, on the same date, Q195-215 grade 48 mm x 3.25 mm welded pipe and Q215-235 grade 114 mm x 3.75 mm welded pipe prices in the above markets are standing at $619/mt and $624/mt. All the above prices include 17 percent VAT.
 
The Chinese domestic seamless pipe market has moved on a downward trend during the past week, with the soft trend of billet prices contributing to reduced quotations of pipe producers. In addition, the trading volume has remained at low levels. It appears difficult for the seamless pipe market to emerge from its current weakness. However, since billet prices have started to decline at a slower rate, it is believed that the domestic seamless pipe market will just see a small decline in the coming week.
 
Local welded pipe prices in China have declined by a smaller margin in the past week as compared to the previous week. Strong supply and low demand are still the main negative factors weighing on the welded pipe market. Also, amid shortages of funds and affected by weather conditions, demand from the domestic construction industry is low. Meanwhile, prices of steel strip, the feedstock for welded pipes, also declined during the past week. Overall, the domestic welded pipe market is likely to continue its weak trend during the coming week.