No improvement in activity levels in Chinese steel pipe market

Trading activity has been slow in the Chinese steel pipe market in the past week, with seamless pipe prices stable and welded pipe prices indicating a slight increase.
 
As of December 5, in China's three main steel markets, i.e., Shanghai, Guangzhou and Beijing, the average price of 20# (GB/T8162-1999) grade 108 mm x 4.5 mm seamless pipe now stands at $693/mt, with 20# (GB/T8163-1999) grade 219 mm x 6 mm seamless pipe at $734/mt. Meanwhile, on the same date, Q195-215 grade 48 mm x 3.25 mm welded pipe and Q215-235 grade 114 mm x 3.75 mm welded pipe prices in the above markets are standing at $598/mt and $601/mt respectively. All the above prices include 17 percent VAT.
 
China's domestic seamless pipe market has moved on a stable trend during the past week. Since the downstream demand side is still characterized by slackness, traders have no choice but to reduce their volumes of purchases from the mills. Nevertheless, despite the slow trading activity, neither mills nor traders plan to reduce their prices for now and so for the coming week the domestic seamless pipe market is thought likely to continue its sideways trend.
 
The local Chinese welded pipe market has witnessed slight downticks in prices in the past seven days, mostly since traders are willing to give up some of their profit margins in order to attract more demand towards the end of year, especially as funds are on the tight side. Domestic steel strip prices have edged up during the past week, providing some support for welded pipe prices. To sum up, traders are willing to cut prices and bring in cash, but costs remain at relatively high levels. For the coming week, it is thought that welded pipe prices in China may again indicate some slight softness.