Welding Steel Pipe Market Price in Potential Weak Tone

International market price of welded steel pipe for natural gas and oil pipelines is weakening. The current price is around FOB US$ 900-1,000 per tonne for API X56 or X65 pipe with 20-inch outside diameter. Japanese trader said some contracts are concluded at below US$ 900 when the demand is globally stagnant and Japanese mills are under severe price competitions with offshore pipe makers. The price may decline more in the second half of fiscal 2010 ending in March 2011.

Welded steel pipe demand is totally stagnant from energy related projects and wholesalers. There are few small-scale energy projects recently, the main application of welded pipe. Welded steel pipe makers in USA and China are aggressively selling their products in USA, China and other Asian countries. Severe price competition impacts the international market price.

The international market price still keeps the level but some suppliers seem to have accepted cheaper price for second half of F2010 contracts. Japanese mills are cautiously selecting orders at profitable price levels. However, price negotiations are hard under price competition with offshore pipe makers.