* This posting is the second in a series of postings reviewing the China Steel Pipe market in 2008.

2. Price

The price of steel pipes fluctuated radically in 2008. The main driver behind high prices in the first half of the year was the high price of raw materials generally, while changes in the macroeconomic environment in the second half of the year caused prices to slump.

The price of seamless pipes climbed from RMB5550 in January 2008 to around RMB8000 in July, but started falling shortly afterwards. By December, the price had dropped to below RMB5000, lower than the price at the beginning of the year.

The price of welded pipes also increased to around RMB6000 in June, from RMB4500 in January, but dropped to RMB3700 in Beijing at the end of 2008.

3. Imports & Exports

China exports far greater quantities of steel pipes than it imports.

China exported a total of 8.4 million tons of steel pipes from January to October 2008, a decrease of 897.8 thousand tons compared to the same period in 2007. Exports of welded pipes decreased by 1.6 million tons year-on-year, while exports of seamless steel pipes increased by 876.6 thousand tons. Welded pipe exports decreased significantly in 2008 because the export tariff rebate on welded pipes was cancelled in July 2007. Yet exports of welded pipes increased again from late 2008 as the tariff rebate was introduced again in response to the global financial crisis.

During the period January-October 2008, China imported 860.7 thousand tons of steel pipes, a year-on-year increase of 86 thousand tons. The majority of these steel pipes are comparatively high-ended, of which China has limited capacity at present.