Chinese seamless pipe prices maintain their rise

Wednesday, 01 July 2009 17:39:04 (GMT+3)   |  
       

As expected at the beginning of June, seamless pipe prices in China continued to rise slowly throughout the month. In particular, domestic quotations have increased by RMB 100-300/mt ($15-45/mt) over the past month, with offers of Chinese seamless pipes for export increasing by $10-30/mt.

Chinese domestic prices of seamless pipes, 2"-8" grade B according to ASTM A106, are varying at around RMB 4,100-4,500/mt ($600-660/mt) ex-works, excluding 17 percent VAT. At the same time Steel Orbis has learned that current transactions are concluded at about RMB 3,800-3,900/mt ($560-570) ex-works also excluding VAT. Meanwhile, 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 $660-720/mt FOB.

Chinese domestic quotations of casing and tubing pipes, 2"-8" API 5CT J55 with plain ends, are at the level of RMB 4,600-4,900/mt ($670-720/mt) ex-works, excluding 17 percent VAT. On the other hand, export quotations for 7" casing J55 as per API 5CT, BTC thread type, are in the range of $700-720/mt FOB, quotations for 9 5/8" casing are at $740-760/mt FOB, with 13 3/8" casing at $790-800/mt FOB.

However, the price of seamless pipes will perhaps rise in the coming days as quotations of raw material, i.e. of round billets, have already increased a little. Most big mills in China which produce billets have enough confidence in the future market, and so they are willing to increase the price of raw materials.

Also market participants expect increased demand in the domestic market because of government investments in construction projects.

The export volume of seamless pipes may also rise a little due to the increase in the tax rebate for ASTM seamless pipes from five percent up to nine percent. During the first three months of this year exports of seamless pipes from China decreased to 861,500 mt, compared to 1,117,300 mt in the same period of last year.

Market insiders hold the view that solid support does not exist for a strong upward trend in China's seamless pipe market. They think that an upward trend would be hard to sustain over a long period as demand has not obviously recovered.


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