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Seamless steel pipe market moving upward in China

By unknow , 2008-06-19 12:00:00

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It is reported that as the construction steel market is under fluctuations, the seamless steel pipe seems still moving upward with the price kept on a high track.

According to some steel trade players, 102mmx4.5mm seamless pipe is standing at CNY 8000 per tonne in Shanghai Xiangshan Steel Trade Market, 108mmx4.5mm some CNY 7800 per tonne, 133mmx4.5mm at CNY 7800 per tonne, 159mmx5mm at CNY 7700 per tonne and 219mmx6mm at CNY 8050 per tonne up by CNY 100 per tonne to CNY 150 per tonne from a week ago.

Following reason why the seamless steel market has kept an upward movement and rocketing price in June are listed based on the traders and industry insiders.

1. The resource availability tends to be tight and in some areas supply even falls short of the demand.
Product mix upgrade and spiking production cost have blocked operation or cut output in some re-rollers this year, thus dwindled supply of the seamless steel pipe. After the quake in Sichuan, restrained transport also hindered timely complementation of the resource in some markets, leading to regional and periodical short supplies and climbing prices.

2. Tubular billet price perches high, production cost higher.
From mid May, the tubular billet prices have repeatedly recorded highs. Rising coke, coal, electricity, oil and transport costs, the re-rollers commonly feel pressure and some have hiked ex works price while cut output. By mid June, some carbon structural tubular billet prices were raised by CNY 50 per tonne further and 20 to 40# common specifications went to CNY 6760 per tonne. As a result, the seamless pipe factories also lifted ex works price by CNY 250 per tonne to CNY 500 per tonne with some 108mm*4.5mm gets to CNY 8000 per tonne.

3. The nice international market and price continues exerts a positive effect on the domestic market.
In April, export of steel pipe amounted to 715,100 tonnes up by 186,100 tonnes accounting for 14.98% of total steel exports. In specific, seamless steel pipe took 393,200 tonnes up by 66,600 tonnes. From January to April, export of seamless steel pipe came to 1.5089 million tonnes up by 21.4%YoY. 458,700 tonnes oil and natural gas line pipe steel up by 512.5% and 737,300 tonnes drilling pipe steel up by 44%.

The market survey makers think these factors conduce to recent solidness in seamless steel market and the high price. Yet, demand would shrink since the price rise has gone beyond acceptance of the downstream end users. Traders also feel upset toward the lofty price and start to cut the price for better selling. Sentiment change of the players will to come degree affect future trending. Predictably, Chinese seamless steel pipe market may go into corrections on a high track.

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