China steel mills swamp ONGC pipe tenders

Vol 19, PW 2 (24 Sep 15) Midstream & Downstream

China has a long history of beating India, be it to secure gas from Myanmar, or to farm-in to oilfields in Kazakhstan.

And it’s happening again, with Chinese steel pipe mills walking away with all of ONGC’s orders for seamless line and casing pipe for the current year, making a mockery of Narendra Modi’s ‘Make in India’ mantra. ONGC opened bids on September 1 for 36,357 tonnes of seamless line pipe and held a reverse auction the next day to further beat down prices.

Dubai-based trader Gerab National won after offering 26,087 tonnes from Chinese mills at a FOB (Freight On Board) price of $343/tonne and CIF (Cost Insurance Freight) India price of $430/tonne. Next came UK-based trader Mertex offering the balance 10,270 tonnes also from Chinese mills at a FOB price of $345/tonne and CIF India price of $430/tonne.

Indian manufacturers Maharashtra Seamless, Jindal Saw and Indian Seamless Metal Tubes also bid but could not match Chinese prices. ONGC similarly opened price bids on September 4 for 58,759 tonnes of seamless casing pipe and held a reverse auction on September 9.

Here too China ruled. Mertex offered 57,509 tonnes at FOB $447/tonne and CIF India $552/tonne; Hengyang Valin Steel Tube offered 902 tonnes at a CIF India price of $440/tonne; and Jiangyin City Seamless Steel Tube Factory offered 348 tonnes at CIF India $443/tonne through Indian company Oil Country Tubular (OCTL).