October 2011 | Welded steel tube & pipe
Chinese raw materials drop: Asia Market Analysis
It is our view that distributors have become cautious amid falling prices.
Both billet and HR coil fell sharply in the second half of October, facilitating cuts in welded tubular pricing for the domestic and export market. However, the biggest impact has been on the domestic market. Spot 4” ERW for domestic construction applications fell to RMB4,900/tonne ($655/tonne ex-VAT) down around $40/tonne over the month. Although some mills pointed to improved demand after the October holidays in the first week of the month, it is our view that distributors have become cautious amidst falling prices, which are being driven by concerns over the domestic construction market. As such, they have pulled back from buying and prefer to run down inventory, which is leaving domestic mills battling to secure sales and using price to differentiate themselves.
On the export market, second-tier producers cut the bottom end of the pricing range for API 5L Grade B (ASTM A53) pipe...
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