The rather large 12.5% undertolerance is generally for seamless pipe/tube. The reason is due to the difficulty in keeping the die from wandering/off-center while extruding. See exagerrated picture below:
It is typically a lot easier to get/keep control for welded pipe/tube, because your basic material is plate.
This undertolerance is not directly related to the pipe material, but rather to the method of manufacture: seamless or welded. It may be found in the exact specification (eg. SA-53, SA-106, SA-671,........)
For the most part you have an undertolerance of 12.5% for the seamless, 12.5% for dual specification welded/seamless, and possibly -0.010" for welded.
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