Rising raw material cost pushes up welded pipe prices in UAE

Thursday, 27 August 2009 15:17:19 (GMT+3)   |  
       

Ramadan which began on August 21 is traditionally a period of low business activity in the UAE. In addition, Ramadan has this year coincided with the summer lull in the construction industry. Thus it is not surprising that demand for welded pipes in the UAE has lacked strength in recent weeks, reaching minimum levels in the second half of August. In spite of this, prices have continued to increase because of the rising cost of flat products. Currently, offers of Russian and Ukrainian HR coils for September production are being given to the UAE at around $580-600/mt C&F, $20-40/mt higher than last month. HR coils from South Korea have been offered to the UAE market at about $650-660/mt C&F, with HR coils from China being offered at $540-560/mt C&F. In this context, local producers of welded pipes have increased their quotations by $20/mt over the past month. In the import market, offers of Chinese welded pipes have risen by $70-80/mt, while offers of South Korean material have climbed by $100-125/mt. At the same time quotations of Indian welded pipes for the UAE have remained unchanged at previous levels.

Domestic prices for locally produced 2"-4" welded pipes grade B made to ASTM A53 or BS 1387 are at about $720-730/mt ex-works, while ½"-¾" pipe sizes are at $740-760/mt ex-works. At the same time, some local producers report that for cash payment prices may go down to $600-620/mt ex-works for 2"-2 ½" ERW pipes and to $650/mt ex-works for ½"-1 ½" ERW pipes.

Offers of Chinese ERW pipes up to 10" grade B as per ASTM A53/API 5L are being given to the UAE market at $780-840/mt C&F, compared to $710-760/mt C&F one month ago.

Indian suppliers are offering ERW pipes up to 6" as per BS 1387 (light series) at the previous level of $730-750/mt C&F. Indian producer Surya Roshni is offering 6"-12" ERW pipes grade A made to ASTM A53 to the UAE market at $675-750/mt C&F, while it is offering 16" pipes at $725-800/mt C&F.

South Korean ERW pipes up to 16" grade B made to ASTM A53/API 5L are currently being offered to the UAE at around $850-900/mt C&F, with 18"-20" ERW pipes at $1,050/mt C&F. Base prices of SAW pipes above 26" from South Korea are at $1,200-1,250/mt C&F.

Due to the global rise in flat rolled steel prices, quotations of welded pipes in the UAE may increase in the coming weeks. Nevertheless, demand in the UAE is expected to be moderate until late September taking into consideration the month of Ramadan and also the fact that construction projects in this country have not yet been restarted. Most market players seem to be optimistic as regards the prospects for the UAE domestic welded pipe market in the autumn.


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