Welded pipe prices still on downtrend in China

The Chinese welded pipe market has softened over the past two weeks amid falling substrate costs and slow business activity during the National Day holiday. Domestic prices for locally produced welded pipes have declined by RMB 50-200/mt ($10-30/mt) over the period under review, while export offers have decreased by $10-20/mt. Market players do not expect any improvement in the market in the coming period. As monetary policy in the country is expected to remain strict until the end of the year, demand for welded pipes from local buyers will not grow substantially in October. Demand from foreign customers is also presenting a weak trend amid the weakening of the euro and the national currencies in a number of countries. Accordingly, market insiders expect the downward trend in welded pipe prices in China will probably continue in October.
 
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 4,700-5,000/mt ($735-780/mt) ex-works, while 2"-6" welded pipes of grade B as per ASTM A53 are at RMB 5,500-5,600/mt ($860-875/mt) ex-works. These local market welded pipe prices include 17 percent VAT.
 
Current export prices of Chinese welded pipes, 2"-8" grade B according to ASTM A53, are varying at around $820-840/mt FOB on actual weight basis, while 10"-18" welded pipes are at $850-940/mt FOB.
 
According to the China Iron and Steel Association (CISA), in August this year China exported 265,272 mt of welded pipes, indicating a decrease of 14.2 percent from the July level but up 44.8 percent year on year. Exports of welded pipes from China in the first eight months of 2011 reached 2,328,602 mt, up 33.2 percent on the corresponding period of 2010.