While both price increases and decreases were seen in the Chinese domestic HRC market last week, the major Chinese steelmakers maintained the upward trend of their ex-factory prices. Welded pipe prices in China have moved up in particular on the back of the rising ex-factory prices for HR coils. Domestic prices of Chinese welded pipes have soared by RMB 200-300/mt ($30-45/mt) over the past week, while export quotations have increased by $30/mt.
Current offers of locally produced welded pipes, 2"-6" Q215-Q235 grade, are being given to the domestic market at an average of RMB 5,500-5,700/mt ($805-835/mt) ex-works, compared to RMB 5,200-5,500/mt ($760-805/mt) ex-works last week. These local market prices include 17 percent VAT.
Current export prices of Chinese welded pipes, 2"-8" grade B according to ASTM A53/API 5L, are varying at around $810-850/mt FOB, compared to $780-820/mt FOB one week ago.
The trend of China's domestic HRC market is expected to stabilize in the coming period, and this will likely slow down the massive increases in welded pipe prices. Some traders are expecting higher demand for welded pipes in May, usually a booming month for outdoor construction. However, there are still uncertainties surrounding the growth of exports and domestic demand, given the continuing reliance to a certain degree on government stimulus measures and also the pressure from production costs as indicated by the surging input price index. The authorities in China are concerned about rising inflation and potential asset bubbles, especially in the real estate market.