Little has changed in the US standard pipe market over the last several weeks, as inventories remain high, demand remains slow and prices continue to soften.
The domestic US standard pipe market has been particularly quiet recently, with mills getting very few inquiries. While most domestic mills are still attempting to offer some ERW (electric resistance weld) BPE (black plain end) Grade A standard pipe for approximately $42.50 cwt. to $44.50 cwt. ($937/mt to $981/mt or $850/nt to $890/nt ex-mill, most mills have been willing to settle at around $40.00 cwt. ($882/mt or $800/nt) ex-mill or perhaps even lower, depending on the sizes and quantity of the order. Furthermore, according to the most recent Metals Service Center Institute (MSCI) monthly report, while the average inventory overhang for domestic pipe and tube was 3.1 months in September, the lowest since October 2008, many distributors believe that at current market conditions, the over three months of pipe and tube supply based on September shipments would probably extend to about six to eight months based on current shipment levels.
On the import side, the number of competitive offshore import standard pipe offers to the US has dwindled down to just a couple over the last three weeks, since our last report. Leading the way for import ERW BPE Grade A standard pipe offers is Korea, with most offers at approximately $33.00 cwt. to $35.00 cwt. ($728 /mt to $772 /mt or $660 /nt to $700 /nt) duty-paid, FOB loaded truck in US Gulf ports. There are still a few other foreign sources floating around offers to the US but Korean offers are at least $1.00 cwt. to $2.00 cwt. ($22/mt to $44/mt or $20/nt to $40/nt) lower than all competition. Traders are aware of Korean mills' aggressiveness in this passive market and have demonstrated some interest mostly by increasing quoting activity; however, it is still difficult for traders or their customers to justify pulling the trigger on any deal with so much inventory still lying on the ground at ports and at the distributor/service center level.
Meanwhile, ERW ASTM A53 galvanized plain end (GPE) standard pipe offers may be the more attractive standard pipe commodity for traders; however, Indian mills are the only real player offering to the US and they are not demonstrating the same aggressiveness as Korea is. In fact, Indian mills increased standard GPE offers by about $1.50 cwt. ($33/mt or $30/nt) over the past couple weeks and are now offering in the approximate range of $42.50 cwt. to $43.50 cwt. ($937 /mt to $959 mt or $850 /nt to $870 /nt) duty-paid, FOB loaded truck in US Gulf ports. Indian mills have no desire to chase after overseas orders at this point, although they may become aggressive in the near future if other Asian competition emerges.
License data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that total import tonnage of standard carbon steel pipe slightly decreased from 35,172 mt (final census data) in September to 33,878 mt in October. The top three exporters of standard carbon pipe to the US during October were Canada, at 14,924 mt; Mexico, at 4,494 mt; and Korea, at 2,013 mt.