Demand still lukewarm in Chinese welded pipe market

Demand in China's welded pipe market has remained lukewarm after the Lunar New Year holiday as sentiment is still weak. Tight liquidity, rising steel inventory, weakening raw material prices and snowy and rainy weather in China, which is curbing construction activity, have all negatively affected trading activity in the welded pipe market. Most Chinese producers have not decided on their future quotations yet and have kept their prices unchanged over the past three weeks. Over the same period, Chinese traders have decreased their offers for local customers by a maximum of RMB 40-50/mt ($7-8/mt). Due to sluggish buying activity from foreign consumers, export quotations of Chinese welded pipes have moved sideways over the past three weeks. Market insiders believe welded pipe prices in China will remain at low levels in the short term amid downbeat expectations as well as mounting inventory pressure.
 
Current offers of locally produced 2"-6" welded pipes of grade B as per ASTM A53 are being given to the Chinese domestic market at an average of RMB 4,000-4,200/mt ($655-688/mt) ex-works. These local market welded pipe prices include 17 percent VAT. Traders in Shanghai are offering Q215-Q235 welded pipes made to GB/T3091 at around RMB 3,500-3,650/mt ($574-598/mt) ex-warehouse, while stockists in the cities of Tianjin and Beijing are offering similar pipes at RMB 3,330-3,450/mt ($546-566/mt) ex-warehouse.
 
Current export prices of welded pipes from large Chinese mills, 2"-10" grade B according to ASTM A53, are at around $620-650/mt FOB on actual weight basis.
 
$1 = RMB 6.10