Over the past month Chinese welded pipe prices have changed their direction, decreasing by RMB 350-500/mt ($50-75/mt) for the domestic market and by $50-60/mt for export. Most local welded pipe producers have continued to concentrate on feeding demand in the domestic market, which is in a better state compared to demand in the export markets. Nevertheless, high stock levels have provoked a price decrease and this downtrend may continue in the short term. However, as the decline of Chinese hot rolled coil prices is slowing, welded pipe producers in China think that local welded pipe prices may reach the bottom soon.
Current offers of locally produced welded pipes, 2"-10" Q215-Q235 grade, are being given to the domestic market at an average of RMB 3,850-4,000/mt ($565-585/mt) ex-works, compared to RMB 4,200-4,500/mt ($615-660/mt) ex-works one month ago. These local market prices include 17 percent VAT.
Export demand remains precarious. Given the trade restrictions in North America and Europe, Chinese welded pipe prices are not competitive in these regions. Even in the Middle East countries, where there are no antidumping measures in effect against pipes from China, Chinese suppliers of welded pipes are faced with acute competition from Turkish and South Korean sellers. At the moment the strongest export markets for Chinese welded pipes appear to be emerging markets such as the Philippines and Algeria. Current export prices of Chinese welded pipes, 2"-8" grade B according to ASTM A53/API 5L, are varying at around $670-720/mt FOB, compared to $720-780/mt FOB one month ago.
Despite the weak demand from foreign customers Chinese pipe producers continue to produce large volumes of ERW pipes, resulting in increased inventories in the domestic market. According to the China Iron and Steel Association (CISA), in July China produced 2.6 million mt of welded pipes, less than June's 2.76 million mt, and marking an increase of 23.8 percent year on year. Meanwhile, China's welded pipe production during January-July of this year reached 16.11 million mt, up 15.2 percent on the corresponding period of last year.