Similar to US tubing producers, US pipe mills are expected to increase prices in the coming weeks to ride the momentum of the flat rolled market, , which may leave the door slightly open for import pipe offers to gain a more of a foothold in the US market.
While electric resistance welded (ERW) ASTM A53 galvanized plain end (GPE) standard pipe has been the most active pipe import offering in recent weeks, offers have remained a little too high for US buyers, with offers from India at around $42.00 cwt. to $43.00 cwt. ($926 /mt to $948 mt or $840 /nt to $860 /nt) duty-paid, FOB loaded truck in US Gulf ports. However, ERW black plain end (BPE) standard pipe offers have begun to see a little more quoting activity in recent weeks. Most offers are from Turkey, Venezuela and Korea and prices range from approximately $35.00 cwt. to $36.00 cwt. ($772 /mt to $794 /mt or $700 /nt to $720 /nt). All offers, including the additional freight from Korea are duty-paid, FOB loaded truck in US Gulf ports.
Meanwhile, API X42 ERW line pipe offers from Korea increased by approximately $1.00 cwt. ($22 /mt or $20 /nt) over the past two weeks and can be found mostly ranging from approximately $37.00 cwt. to $38.00 cwt. ($816 /mt to $838 /mt or $740 /nt to $760 /nt) duty-paid, FOB loaded truck in West Coast ports. However, most other offshore offers for the same product are hovering around $40.00 cwt. ($882 /mt or $800 /nt).
Nevertheless, despite some expected slight US domestic price recovery and mild import price recovery, US pipe demand remains in a weakened state, with US interest in offshore pipe still drastically down from where it was a year ago. And with most import offers currently delivering at the end of the fourth quarter, when customers are in "de-stocking mode", pipe import volumes will most likely remain in a depressed state for the duration of the year.
Preliminary license data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that total import tonnage of standard pipe decreased from 39,040 mt in July to 31,652 mt in August, which is almost three time as less as the 89,376 mt imported in August 2008. The top three exporters of standard pipe to the US in August were Canada, at 11,368 mt; Mexico, at 4,768 mt; India, at 3,442 mt.
Meanwhile, preliminary license data indicate that total import tonnage of line pipe to the US decreased significantly from 92,919 mt in July to 39,860 mt in August, which is more than four time less than the 169,805 mt of total imports to the US in August 2008. Canada exported the most tonnage to the US in August, at 18,445 mt, while the next closest importer was Korea, at 3,564 mt.
In addition, the US oil country tubular goods (OCTG) market is still reeling from the huge purchases made during the industry's peak last summer, which, along with the US' antidumping and countervailing duty cases filed against Chinese OCTG this year, has led to an astounding decrease in import OCTG tonnage this year. Preliminary license data shows that total import tonnage of OCTG to the US decreased from 34,631 mt in July to 15,370 mt in August, which down tremendously from the 289,382 mt imported during the same period last year. OCTG domestic and import activity is likely to stay dormant for the foreseeable future as distributors suggest that there is still the equivalent of two years worth of inventory lying around at port docks and service center warehouses.
Furthermore, according to Baker Hughes Incorporated, while active US rig counts increased last week by 14 from the previous week, making for a total of 999, this figure is still 1,032 fewer in comparison to the same week last year.