The domestic pricing trend for OCTG and line
pipe is firm, though the import market has remains rather weak.
The North American rig count as of the week ending September 1 is at 2,237, up significantly from the 1,968 rigs for the same week of last year. Meanwhile, the domestic OCTG and line
pipe prices continue to benefit from the booming energy industry. OCTG offers on the market range from approximately $74.00 cwt. to $76.00 cwt. ($1,631 /mt to $1,676 /mt or $1,480 /nt to $1,520 /nt), while seamless line
pipe offers range from $98.00 cwt. to $100.00 cwt. ($2,161 /mt to $2,205 /mt or $1,960 /nt to $2,000 /nt).
The pricing trend for line
pipe is slightly stronger than the trend for OCTG, as there are numerous amounts of OCTG imports that domestic producers must compete with. However, demand remains strong enough to keep domestic tags steady despite the cheap import prices.
Experts predict that domestic API
pipe producers will control their
production, operating at less capacity to keep prices flat for the remainder of the year.
The import market for OCTG and line
pipe is not nearly as strong as the domestic market, as import
pipe prices are being dragged down by lower import hot rolled prices and lower import ERW pricing. Demand is still strong, but the pricing trend is down for these reasons. It is expected that low-quality pipes will continue to trend down, while higher grades (made from hot rolled that is made from slabs rather than billets) will stay stable.
Korea remains one of the largest exporters of OCTG and line
pipe to the US, and the preliminary results of the antidumping review for OCTG from Korean exporters Husteel Co Ltd. and SeAH Steel Corporation during the period from August 1, 2004 through July 31, 2005 were released last week by the Department of Commerce. The Department has preliminarily ruled the weighted-average dumping margins of 0.85 percent for Husteel and 0.58 for SeAH, compared to the current dumping duty deposit rates of 12.30 percent for HuSteel and 6.84 percent for SeAH. These lower AD rates mean that we will start to see even more
pipe imports coming from
Korea.
Census data from the US government shows that during the first six months of 2006, the top five countries from which the US imported line
pipe from were:
Japan, at 118,001 mt;
China, at 107,703 mt;
Canada, at 104,750 mt;
Korea, at 95,193 mt; and
Brazil, at 49,821 mt.
The top five exporters of OCTG to the US from January through June 2006 were:
China, at 276,692 mt;
Korea, at 85,012 mt;
Germany, at 84,832 mt;
Austria, at 82,599 mt; and
Canada, at 74,860 mt.