In line with the prices of hot rolled coil, Chinese welded pipe prices have dipped due to low transaction levels. Domestic prices of Chinese welded pipes have decreased by RMB 400-500/mt ($60-75/mt) over the past two weeks, while export quotations have moved down by $50-60/mt. The construction steel market in China has declined, affected by the central government's tighter real estate policies. The fundamental reasons behind the decrease are oversupply and insufficient demand. In this context, steelmakers should take the initiative to cut or limit productions to hold on their prices. Market insiders foresee a further price decline in the coming short-term period due to the pressure from increasing inventory.
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the domestic market at an average of RMB 5,000-5,300/mt ($730-775/mt) ex-works, compared to RMB 5,500-5,700/mt ($805-835/mt) ex-works two weeks ago. These local market prices include 17 percent VAT.
According to the China Iron and Steel Association (CISA), in April China produced 2.934 million mt of welded pipes, more than March's 2.874 million mt and marking an increase of 18.1 percent year on year. Meanwhile, China's welded pipe production in the first four months of this year reached 9.937 million mt, up 19 percent on the corresponding period of last year.
Current export prices of Chinese welded pipes, 2"-6" grade B according to ASTM A53/API 5L, are varying at around $750-800/mt FOB, compared to $810-850/mt FOB two weeks ago.