Chinese producers of welded pipes have generally maintained their domestic and export quotations at unchanged levels amid stable prices for feedstock materials and lacklustre domestic demand. Market players expect to see better demand from local customers after the rainy season, which is usually followed by improved business activity. In June-July Chinese welded pipe suppliers will be mainly focused on the export markets and will probably try to lift their prices due to increased electricity prices and slight improvements in hot rolled coil (HRC) quotations. However, due to sluggish demand, welded pipe suppliers find it difficult to increase their quotations. Market players report that the production of welded pipes in China may start to drop in June this year because of impending power shortages.
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the Chinese domestic market at an average of RMB 4,800-5,100/mt ($740-785/mt) ex-works, while 2"-6" welded pipes of grade B as per ASTM A53 are at RMB 5,400-5,600/mt ($830-865/mt) ex-works. These local market welded pipe prices include 17 percent VAT.
Current export prices of Chinese welded pipes, 2"-6" grade B according to ASTM A53, are varying at around $780-810/mt FOB on actual weight basis.
The rising trend in China's welded pipe export volume did not continue in April due to weakening overseas demand and the shrinking price gap between the domestic and overseas markets. Nevertheless, the export volume still remained at high levels. According to the China Iron and Steel Association (CISA), in April this year China exported 297,394 mt of welded pipes, indicating a decrease of 13.1 percent from the March level but up 32 percent year on year. Exports of welded pipes from China in the first four months of 2011 reached 1,157,705 mt, up 47.9 percent on the corresponding period of 2010. Chinese welded pipe exporters foresee that the export volume will not follow a rapid rising trend in the coming period, due to the lack of improvements in overseas demand. As a result, only by improving product quality and opening up new export markets, will it be possible to improve the competitiveness of China's welded pipes in the export markets.