Weakness in Chinese seamless pipe market during National Day holiday

The Chinese seamless pipe market has presented a weak trend over the past two weeks amid slack activity of end-users and traders before the National Day holiday (October 1-7). Over the past two weeks, Chinese suppliers have decreased their domestic quotations by RMB 50/mt ($10/mt), while export offers have gone down by $20-30/mt. Besides, the weakness of the Chinese currency and falling iron ore prices have also contributed to the decline. With the government's efforts to fend off inflation, China will keep its tight monetary policy, which will continue to weigh on demand from steel-consuming users. As a result, the downward trend in seamless pipe prices will probably continue in October impacted by a slowdown in China's ecconomic growth with inflation pressure and tight monetary policies, by the financial problems in Europe, weakening global economic forecasts and the stronger dollar.
 
Chinese domestic prices of 2"-8" seamless pipes according to GB/8163 are varying at around RMB 5,750-5,800/mt ($900-905/mt) ex-works, including 17 percent VAT. Domestic prices of seamless pipes, 2"-6" grade B as per ASTM A106/API 5L, are at around RMB 6,400-6,600/mt ($1,000-1,030/mt) ex-works.
 
Current export offers of seamless pipes from Chinese manufacturers for 2"-12" grade B material according to ASTM A106/ASTM A53/API 5L are on average at $950-1,010/mt FOB, while 14"-24" seamless pipes are at about $1,060-1,100/mt FOB.
 
Export quotations for 4 ½"-13 3/8" casing, J55 as per API 5CT, plain ends, are at $1,120-1,150/mt FOB, while 2 7/8"-3 1/2" tubing, plain ends, are at around $1,170-1,200/mt FOB.
 
According to the China Iron and Steel Association (CISA), China exported 462,929 mt of seamless pipes in August, indicating an increase of 1.8 percent from the July level and up 36.5 percent year on year due to the new developing markets in Africa, South America and Central Asia. Exports of seamless pipes from China in the first eight months of 2011 reached 3.062 million mt, up 24 percent on the corresponding period of 2010.