Seamless and welded pipe prices maintain rising trend in China

During the past week ending January 21, steel pipe prices have kept rising in the Chinese domestic market. Given higher production costs, most market insiders are now looking forward to further increases in domestic seamless pipe and welded pipe prices after China's Spring Festival.

In China's three main steel markets, i.e., Shanghai, Guangzhou and Beijing, the prices of 108 mm x 4.5 mm size seamless pipe now respectively stand at RMB 5,850/mt ($888/mt), RMB 5,750/mt ($873/mt) and RMB 6,100/mt ($926/mt), with 4 mm x 3.75 mm welded pipe prices respectively at RMB 5,000/mt ($759/mt), RMB 4,850/mt ($736/mt) and RMB 5,100/mt ($774/mt).

The above prices include VAT of 17 percent. ($1 = RMB 6.58)

Seamless Pipes

On the back of rising production costs, seamless pipes prices have continued to trend up in the Chinese domestic market during the week ending January 21.

In eastern China, the price hikes implemented by local steel producers as well as the limited supplies of round billet have both contributed to the current rising price trend in the market. As the Spring Festival approaches, both traders and end-users are now adopting a waiting strategy.

In the southern region of China, market prices of seamless pipes have climbed up slightly. Round billet supply remains tight. Similar to the eastern market, market activity in the south has been slow as nobody wants excessive amounts of inventory in stock.

In northern China, there has hardly been any improvement in market transaction volumes, as compared to the previous week. Buying activity remains relatively slow, but steady nonetheless.

Welded Pipes

In eastern China, the harsh snowy weather has been negatively affecting deliveries of welded pipes, and so in January new product arrivals are on the low side. Also, as the Spring Festival is coming, welded pipe traders are planning to leave the market; they are thus keeping their inventories at low levels and are maintaining a cautious approach to restocking until the market trend becomes clearer, with the result that while the market has risen there are no buyers.

In southern China, the welded pipe market has followed a slightly soft trend in the past week. Chinese welded pipe manufacturers are still facing pressure from higher production costs, due to rising raw material prices and the good future outlook for downstream demand

In northern China, welded pipe inventories and purchasing activities in the local market are still low. Most steel enterprises have started to withdraw from the market. Therefore, there will not be any big changes in the local welded pipe market in the period before the festival. It is expected that welded pipe prices would probably trend sideways in the next week.