Higher production costs push up welded pipe prices in China

Over the past two weeks, the Chinese welded pipe market has presented an upward trend on the back of rising production costs. Domestic welded pipe prices have gone up by RMB 100/mt ($15-20/mt) over the past two weeks, while export quotations of Chinese welded pipes have increased by $10-20/mt. However, demand from local buyers remains sluggish due to the hot and rainy weather in the country, while foreign customers are inactive amid the holiday season. Although buying activity is expected to revive in September at the earliest, Chinese welded pipe makers will likely be forced to lift their prices further due to rising feedstock quotations. Meanwhile, most traders prefer to to take a wait-and-see attitude towards the future market as demand is still weakening and as market deals are decreasing.
 
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 4,900-5,150/mt ($760-800/mt) ex-works, while 2"-6" welded pipes of grade B as per ASTM A53 are at RMB 5,500-5,550/mt ($855-865/mt) ex-works. These local market welded pipe prices include 17 percent VAT.
 
Current export prices of Chinese welded pipes, 2"-8" grade B according to ASTM A53, are varying at around $800-900/mt FOB on actual weight basis, while 10"-18" welded pipes are at $830-970/mt FOB.