Chinese welded pipe producers still face downward price pressure on the back of domestic demand worries and low interest from foreign buyers. Prices for Chinese welded pipes have continued to move down following declines in hot rolled coil (HRC) prices.
Export quotations of welded pipes from Chinese manufacturers have declined by $10-20/mt over the past two weeks. The cancellation of the export rebate has definitely placed greater pressure on the already poor export market. It is likely that the export situation in August will continue to be soft, as the export rebate cancellation takes effect as of July 15 and as the global economy still faces uncertainties.
The domestic welded pipe market also remains weak. Domestic demand for welded pipes is expected to be poor in the third quarter due to the expected reduction in construction activity caused by unfavorable weather conditions in this period of the year. At the same time, the leading Chinese steelmakers Baosteel has reduced its August prices for HRC by RMB 300/mt, as compared to July prices. Continued price cuts damage the market sentiment and are a reflection of concerns regarding weakening economic prospects. It is expected that in the coming weeks the Chinese welded pipe market will continue its downward trend.
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the domestic market at an average of RMB 3,800-4,100/mt ($560-605/mt) ex-works. These local market prices include 17 percent VAT.
Current export prices of Chinese welded pipes, 2"-6" grade B according to ASTM A53/API 5L, are varying at around $700-740/mt FOB on actual weight basis.