On October 6, the European Union announced that it will impose definitive antidumping (AD) duties on seamless pipe imported from China, ranging from 17.7 percent to 39.2 percent. For Chinese seamless pipe producers it will now be much harder to export to the EU, as the AD duties cover most seamless pipe series. The decision of the European Union may also influence the result of the AD case in the United States. On October 7, the US Department of Commerce announced the initiation of an investigation into the dumping and subsidization of seamless pipe imports from China, with alleged dumping margins of nearly 100 percent. The products covered by this investigation include seamless carbon and alloy standard, line and pressure pipe less than or equal to 406mm in outside diameter.
According to data from the China Iron and Steel Association (CISA), in August exports of seamless pipes from China totalled 238,387 mt, down 11.9 percent from July and down 58.9 percent from August last year. Trade barriers in overseas markets are one reason for the decline in exports. Most seamless pipe producers in China are pessimistic about the prospects for the export situation during the rest of 2009. They think that the trade restrictions will affect Chinese exports even when demand improves. At present, China's seamless pipe industry will have to quickly seek out new markets.
Over the past three weeks export quotations of seamless line pipes and OCTG from Chinese manufacturers have decreased by $20-50/mt. Current export offers of seamless pipes from Chinese manufacturers for 2"-6" grade B material according to ASTM A106/API 5L are on average at $630-680/mt FOB. Export quotations for 2"-4" tubing J55 as per API 5CT, plain ends, are in the range of $730-780/mt FOB, while quotations for 6"-8" casing are at $700-770/mt FOB, both for October production material.
China's domestic seamless pipe market is expected to show a greater firmness, with a strong focus on the local property sector. The Chinese government has increased lending in recent months and reduced deposit requirements. As a result, real estate investments have started to rise, which will thereby give rise to better demand for long products and pipes.
Chinese domestic prices of seamless pipes, 2"-6" grade B according to ASTM A106 or GB/8163, are currently varying at around RMB 4,500-4,800/mt ($660-700/mt) ex-works, compared to RMB 4,700-4,750/mt ($690-695/mt) ex-works three weeks ago. These local market prices include 17 percent VAT and are on actual weight basis. Domestic quotations of tubing pipes of 2"-4" size, of J55 strength group as per API 5CT, plain-ended, are at about RMB 4,800-5,200/mt ($700-760/mt) ex-works. Chinese domestic prices of casing, 6"-8" grade J55 according to API 5CT, are varying at around RMB 4,600-5,000/mt ($675-730/mt) ex-works.