Chinese welded pipe prices go up slightly

Welded pipe prices in China have started to go up slightly again amid upward movements in iron ore and hot rolled coil (HRC) quotations. Domestic welded pipe prices have climbed up by RMB 50-200/mt ($5-30/mt) over the past two weeks, while export quotations of Chinese welded pipes have increased by $10/mt over the same period. Market players believe that rising raw material prices will push up welded pipe offers further. However, lacklustre of demand will limit the price increase in welded pipe sector. Although domestic demand is predicted to improve amid higher construction activity, the expectation for foreign demand is not bright. Chinese exporters of welded pipes are concerned that the slow economic revival in European countries as well as weak demand will have a great influence on China's exports. Moreover, the continuous hike of raw material costs, expectations of appreciation of the RMB and the tight profit margins for companies involved in foreign trade may result in a slowdown of China's export growth rate.
 
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 4,850-5,100/mt ($745-785/mt) ex-works, while 2"-6" welded pipes of grade B as per ASTM A53 are at RMB 5,400-5,600/mt ($830-860/mt) ex-works. These local market welded pipe prices include 17 percent VAT.
 
According to the China Iron and Steel Association (CISA), in April this year China produced 3.012 million mt of welded pipes, less than February's 3.248 million mt but marking an increase of 18.1 percent year on year. Meanwhile, China's welded pipe production in the first four months of this year reached 10.452 million mt, up 18.1 percent on the corresponding period of last year.
 
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.