Welded pipe prices in China move down as demand remains sluggish

Welded pipe makers in China have decreased their quotations due to weak buying activity and the decline in hot rolled coil (HRC) prices. After the Chinese New Year holiday, the government's ongoing restrictive policies on the property market have caused steel demand to remain sluggish. Currently, many traders are suffering from shortages of funds due to high inventory, sluggish demand and China's tight monetary policy. Domestic welded pipe prices have declined by RMB 150-400/mt ($20-60/mt) over the past two weeks, while export quotations of Chinese welded pipes have decreased by $40-70/mt over the same period. The general market sentiment is pessimistic in China as demand remains sluggish and as buyers are still circumspect. Market sources report that a further decline in welded pipe prices is possible due to the continuous softening of HRC quotations.
 
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the Chinese domestic market at an average of RMB 4,650-5,000/mt ($710-760/mt) ex-works, while 2"-6" welded pipes of grade B as per ASTM A53 are at RMB 4,900-5,200/mt ($745-790/mt) ex-works. These local market welded pipe prices include 17 percent VAT.
 
Current export prices of Chinese welded pipes, 2"-6" grade B according to ASTM A53, are varying at around $740-780/mt FOB on actual weight basis.
 
According to the China Iron and Steel Association (CISA), in January this year China exported 315,992 mt of welded pipes, indicating an increase of 13.6 percent from the December level and up 61 percent year on year.