Buying activity in the Chinese welded pipe market is getting slower due to the rainy season in southern China and due to the floods throughout the country. This wet weather has impeded construction activities and lessened demand from downstream users. Chinese welded pipe suppliers have started to decrease domestic prices in line with feedstock material quotations. Domestic welded pipe prices have gone down by RMB 50-100/mt ($5-15/mt) over the past two weeks, while export quotations of Chinese welded pipes have stayed almost unchanged. However, the sentiments in the overall welded pipe market remain pessimistic for the coming two months, though with hopes for revival in September. The welded pipe price trend from Chinese producers will likely remain weak, considering that buying activity is unlikely to improve in the coming period as the market enters the summer off-peak season.
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 4,750-5,050/mt ($735-780/mt) ex-works, while 2"-6" welded pipes of grade B as per ASTM A53 are at RMB 5,350-5,500/mt ($830-850/mt) ex-works. These local market welded pipe prices include 17 percent VAT.
According to the China Iron and Steel Association (CISA), in May this year China produced 3.261 million mt of welded pipes, more than April's 3.012 million mt and marking an increase of 33.5 percent year on year. Meanwhile, China's welded pipe production in the first five months of this year reached 14.269 million mt, up 24 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 $780-880/mt FOB on actual weight basis.
According to the China Iron and Steel Association (CISA), in May this year China exported 273,396 mt of welded pipes, indicating a decrease of eight percent from the April level but up 0.5 percent year on year. Exports of welded pipes from China in the first five months of 2011 reached 1,431,126 mt, up 35.7 percent on the corresponding period of 2010.