Over the past three weeks Chinese producers of welded pipes have reduced their domestic and export quotations thanks to the reductions in the cost of feedstock material. Export offers of welded pipes from China have dropped by $60-70/mt over the past three weeks, while domestic mills' prices for their local market have fallen by RMB 200/mt ($25-30/mt) in that period. Chinese products are registering some demand in the emerging markets in Southeast Asia, but the quantities involved are small. The general situation remains bleak, with little interest observed in exports. Nevertheless, production of welded pipes in China has been increasing, in August reaching 2.831 million mt, 34.8 percent higher than in August 2008. This increase in output appears to be somewhat alarming given the sluggish export demand. However, market insiders are very optimistic on the issue of economic growth in China. Though the export markets remain significant, market players think that domestic demand levels will support rising production as infrastructure and construction activity picks up. However, for the time being HRC prices have stabilized and may keep welded pipe prices relatively stable in the coming short-term period.
Current export prices of Chinese ERW pipes, 2"-6" grade B according to ASTM A53/API 5L, are at about $600-660/mt FOB. Offers of 2"-8" ERW pipes X52 steel grade as per API 5L are being given to the external market at around $700/mt FOB.
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the domestic market at an average of RMB 4,300-4,600/mt ($630-675/mt) ex-works, compared to RMB 4,500-4,800/mt ($660-700/mt) ex-works three weeks ago. These local market prices include 17 percent VAT and are on actual weight basis.
In the domestic market stockists' quotations of ERW pipes in sizes 1 1/2"-4", of Q235B steel grade, made to Chinese GB standard, are at the level of RMB 3,510-4,000/mt ($515-585/mt) ex-stock compared to RMB 3,700-4,000/mt ($540-585/mt) ex-stock at the end of September.