Welded pipe prices in China move up slightly despite low transaction activity

Over the past two weeks, prices for Chinese welded pipes have continued to move up slightly on the back of rising feedstock quotations, although transaction activity remains low. Domestic welded pipe prices have gone up by a maximum of RMB 50/mt ($10-15/mt) over the past two weeks, while export quotations of Chinese welded pipes have increased by a maximum of $20/mt. Taking into account the upcoming peak season from September to October and higher raw material costs, flat steel quotations may continue their upward trend, forcing Chinese welded pipe makers to lift their quotations in the coming period. However, market participants have increased their prices cautiously due to the still sluggish demand in the traditional offseason and uncertainty in the international financial markets.
 
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 4,850-5,150/mt ($760-805/mt) ex-works, while 2"-6" welded pipes of grade B as per ASTM A53 are at RMB 5,550-5,600/mt ($870-875/mt) ex-works. These local market welded pipe prices include 17 percent VAT.
 
According to the China Iron and Steel Association (CISA), in July this year China produced 3.253 million mt of welded pipes, less than June's 3.751 million mt but marking an increase of 26.7 percent year on year. Meanwhile, China's welded pipe production in the first seven months of this year reached 21.306 million mt, up 24.7 percent on the corresponding period of last year.
 
Current export prices of Chinese welded pipes, 2"-8" grade B according to ASTM A53, are varying at around $820-900/mt FOB on actual weight basis, while 10"-18" welded pipes are at $850-970/mt FOB.
 
According to the China Iron and Steel Association (CISA), in July this year China exported 309,277 mt of welded pipes, indicating an increase of 8.9 percent from the June level and up 34.9 percent year on year. Exports of welded pipes from China in the first six months of 2011 reached 2,024,411 mt, up 29.4 percent on the corresponding period of 2010.