Outlook remains poor for Chinese steel pipe market

China's domestic steel pipe market has continued its overall downward trend in the past week, while the prospects for June are not great due to the arrival of the off-season for demand.
 
As of June 6, 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 $689/mt, with 20# (GB/T8163-1999) grade 219 mm x 6 mm seamless pipe at $732/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 $606/mt and $610/mt. All the above prices include 17 percent VAT.
 
The Chinese domestic seamless pipe market has continued to follow a downward trend during the past week. Current seamless pipe supply is still high and is putting a lot of pressure on the market, while the significant recent drops in iron ore prices have contributed to the weakness of the overall steel market. June forms part of the off-season, which means less demand and more downward pressure on seamless pipe prices. Accordingly, China's domestic seamless pipe market is expected to continue its downward trend in the coming week.
 
China's welded pipe market has also maintained its downtrend during the past week, with varying decrease margins observed. In June, the arrival of the off-season and the rainy weather in eastern and southern China are expected to impact the demand side. Meanwhile, local steel strip prices have moved down further. Overall, the declining trend in China's welded pipe market is expected to continue for another while.