Saudi Arabia, the world's top oil exporter, had already signaled to the major global oil companies that it will keep its oil supplies unchanged in October. Oil rallied from a low of $32.70 in January to peak this year at $75 a barrel on August 25. Crude for October delivery was trading at $71.07. Saudi Arabian Oil Minister Ali al-Naimi said that current oil prices are good for everybody, consumers and producers. A supply cutback is unlikely in the near future even though the market is oversupplied. Despite anxiety over a possible price crash as markets head into the slower autumn demand period with bloated global inventories, OPEC members are banking on recovering economic growth, greater winter demand and existing curbs to help keep prices near their $75-a-barrel goal.
In this context, demand for seamless pipes in Saudi Arabia is expected to rise. The main European producers, Tenaris and V&M, as well as the big Japanese producer Sumitomo, have increased their offer prices for the Saudi Arabian market by $50/mt over the past month. Seamless line pipe suppliers from the CIS have raised their quotations for 2"-8" sizes by $50-80/mt over the same period. Meanwhile, Romanian and South African suppliers have kept their offer prices for seamless pipes at the previous levels. At the same time, the lower end of prices for Chinese seamless pipes has dropped by $30/mt as Chinese producers are trying to increase their export volume in this way.
Import offers of Chinese seamless pipes 2"-6" grade B made to ASTM A106/API 5L are being given to the Saudi Arabian market at $750-800/mt C&F.
Quotations of Ukrainian seamless pipes (Interpipe) 2"-8" grade B made to ASTM A106/API 5L are at $920-955/mt C&F, while 10"-12" pipes are priced at around $980-1,055/mt C&F.
Russian offers 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.
Quotations of seamless pipes from Italy and Argentina (Tenaris), France and Germany (V&M), and from Japan (Sumitomo) for 2"-10" grade B made to ASTM A106/API 5L are at about $1,350-1,400/mt C&F.
As market participants do not foresee any cut in oil prices and supplies, demand for seamless pipes is expected to strengthen slowly and foreign suppliers will likely try to increase quotations for October-November production.