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Compression couplings: Fresh markets sought amid dumping issues

To slow down further revenue losses, makers are probing emerging outlets and offering the previous term's price points.

Additional tariffs are compelling China suppliers of pipes and pipe fittings to seek new marketing strategies to stay afloat. This is a result of the US and the EU having tacked anti-dumping duties on China-made imports of steel pipes for use in the oil and gas industries.

Compression coupling
  Shanghai Zhongcai makes mainly PVC water pipes in 6.3, 10 and 16bar grades.
Already, formal protests have been lodged in several international trade bodies but the majority of enterprises plan to sustain production while waiting for the restrictions to be lifted.

The measures are expected to constrain shipments further and reduce China's steel pipe delivery to the EU and the US by more than 40 percent in the months ahead. In 3Q09, steel pipe exports to both destinations fell 85 and 79 percent, respectively, year on year.

The US, meanwhile, is continuing investigations on unfair trade practices, particularly on producers of seamless copper pipes with more than 152.4mm length and less than 308.102mm diameter. More countries are expected to follow the US and the EU's lead. Argentina, for instance, intends to pursue similar proceedings for carbon steel alloy pipes with a diameter of less than 273.1mm.

So far, tariffs imposed against China seamless metal pipe manufacturers have forced about 70 percent of their rank to stall or limit production. On the other hand, a few enterprises still see the US and the EU as profitable outlets, and are prepared to strengthen their foothold in the markets and pay the extra levies.

To minimize revenue losses, most makers are planning to reroute shipments to the domestic market and to their customary big buyers in Algeria, India and Singapore. Other possible overseas destinations are South America and Africa.

With burgeoning demand from the homefront, steel industry associations in China are likewise lobbying for 13 to 17 percent tax rebates on certain metal products. The government is still considering this appeal.

Steel pipes, which account for 50 percent of the country's total output, remain in great demand for a range of applications such as those for gas conduits and boiler tubes. From January to September 2009, production reached 15.4 million tons of seamless designs worth $3.3 billion. During this period, crude steel output grew 8 percent year on year to reach 420 million tons.

Prices to remain stable
Compression coupling
  Shanghai Deso offers PEX pipes and fi ttings for underfloor heating systems.
Prices to remain stable

Most China makers plan to maintain quotes of metal pipes at present levels as a means of attracting new buyers and retaining existing clients. This approach is agreeable since increases in raw material costs for the next six months are projected to be just within 5 to 10 percent.

In September 2009, hot-rolled steel was pegged at $500 per ton, an 11 percent jump in spot prices from April 2009. At the same time, deformed units peaked at $560 per ton for a 24 percent upturn.

Steel pipes and pipe fittings, together with stainless variants, are the most common metal products in China, although aluminum and copper types are widely available. These can be made of the 200, 300 or 400 series and are electroplated with zinc.

Seamless models are quoted from $3,000 to $6,000 per ton. The dimension and metal grade account for the price variations. Export duties can also raise rates by 5 to 10 percent in the next six months.

Designs made of higher-grade steel have better heat and corrosion resistance and are suited for exterior installation and exposure to mildly caustic environment. Moreover, their tensile strength is hardly reduced even when subjected to welding, postweld annealing or similar processes.

In the plastic segment, PVC, PE, PP and PB are the common materials used. The first three types dominate the market because of their light weight, high strength and low reactivity. For instance, PVC pipes can be fused together easily using common solvent cements or simple heat treatments, resulting in watertight joints.

More than 80 percent of pipes used for water distribution and heating supply are made of plastic. This is because the material resists bacteria more effectively than metal, which can rust and contaminate the water on prolonged use. China's plastic output is projected to rise by over 20 percent annually and reach 6 million tons in 2015.

Similar to the metal sector, prices in this category are generally seen to remain stable in next few months. Depending on the size and material, plastic models go for $400 to $800 per ton. HDPE variants are 30 to 40 percent more expensive than PVC.

Domestic PVC went for $1,000 per ton in November 2009, 8 percent higher than March rates. PP costs climbed from $1,400 per ton in April last year to $1,500 per ton in November.

This article "Compression couplings: Fresh markets sought amid dumping issues" is originally posted in Global Sources.

Note: All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.

Disclaimer: All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. We, our affiliates, and our affiliates' respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof) which infringe on any intellectual property or other rights of a third party.

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