Demand for seamless line pipe and OCTG in Saudi Arabia has strengthened over the past month. Offer prices from top-tier European mills have increased by $50/mt in some cases, although this has been due to the weakness of the US dollar against the euro. Ukrainian mills have generally opted for small increases in their line pipe offer prices, up by $45-50/mt over the period of review. Import quotations of seamless pipes from Russia, Romania and South Africa have remained at their previous levels. Chinese producers of seamless line pipes are looking to export their excess production and are continuing to decrease their prices. Over the past month offer prices of Chinese seamless pipes for Saudi Arabia have dropped by $50-60/mt.
Offers of Chinese seamless pipes 2"-6" grade B made to ASTM A106/API 5L are being given to the Saudi Arabian market at $690-750/mt C&F.
Quotations of Ukrainian seamless pipes (Interpipe) 2"-8" grade B made to ASTM A106/API 5L are at $930-1,000/mt C&F, while 10"-12" pipes are priced at around $1,030-1,100/mt C&F.
Russian seamless pipe offers to Saudi Arabia from TMK subsidiary Volzhsky Pipe Plant are in a range of $950-1,000/mt C&F for material under 8" grade B made to ASTM A106/API 5L, while 10"-16" seamless pipes can be heard at a maximum of $1,050-1,100/mt C&F.
Romanian and South African seamless pipes (ArcelorMittal) 2"-10" grade B made to API 5L are quoted at around $1,050-1,100/mt C&F Saudi Arabia.
Quotations of seamless pipes to Saudi Arabia from Italy and Argentina (Tenaris), France and Germany (V&M), and from Japan (Sumitomo) for 2"-6" grade B made to ASTM A106/API 5L are at about $1,250-1,350/mt C&F, while 10"-12" pipes are priced at around $1,350-1,450/mt C&F.
It is expected that the Gulf Arab economies will grow 5.2 percent next year as oil prices rise, credit markets improve and as the property sector stabilizes, according to the International Monetary Fund (IMF). The growth forecast for Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain and Oman is based on an average oil price of $76.5 a barrel in 2010. In addition, Saudi Arabia's economy is expected to post a recovery as early as the fourth quarter of this year. Confidence is rising in Saudi Arabia and growth should pick up modestly over the remainder of the current year. Saudi inflation slowed to 4.2 percent in July, its lowest level since July 2007. In this context, demand for OCTG and line pipes in Saudi Arabia is expected to rise, which should thereby favor an increase in import prices before the end of this year.