Chinese steel pipe market trends up with support of higher costs

China's market for steel pipes, both seamless and welded, has moved up in the past week, especially with the support of higher upstream costs.
 
As of January 10, 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 now stands at $717/mt, with 20# (GB/T8163-1999) grade 219 mm x 6 mm seamless pipe at $759/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 $635/mt and $641/mt. All the above prices include 17 percent VAT.
 
While China's seamless pipe market was mainly stable before the New Year holiday, it entered an upward trend after the holiday. Inventories are currently below normal levels, and, according to market reports, stocks of certain products are on the tight side. Some traders are maintaining a wait-and-see stance and are wondering how far prices will rise. Under the influence of increased billet prices, local seamless pipe producers are more likely to increase their prices and there still appears to be further room for domestic market prices to rise.
 
China's welded pipe market has moved on an upward trend in the past week supported by higher prices of iron ore and steel strip. However, the demand side has shown some hesitation and the trade volume is not as good as expected. Inventory levels have decreased slightly. It is believed that raw material and feedstock prices may continue to rise in the coming period, though by a smaller margin and that there is a strong possibility that welded pipe prices in China will move up further in the week ahead.