After a fairly strong May, energy pipe sales at the US domestic service center level have been largely apathetic in June, slowing buying activity US domestically and offshore.
US domestic energy pipe distributors tell SteelOrbis that sales were firm in May, and even robust in core sizes of oil country tubular goods (OCTG) casing products, but there has been a noticeable slowdown in June. It is too early to tell whether it's a temporary bump and sales will pick up in July and August, or if the slowdown will continue throughout Q3. One thing is certain, however: US Steel's transaction price increase in mid-June for $7.50 cwt. ($165/mt or $150/nt) on OCTG products and $3.75 cwt. ($83/mt or $75/nt) on line pipe products isn't expected to stick--yet.
While no other pipe mill has followed in US Steel's footsteps and issued a price increase, industry insiders speculate that if other mills do follow, OCTG prices may begin to rise. Any price increase on line pipe, however, will be more difficult to attain. While line pipe demand has been steady, the market may not be strong enough to absorb higher prices, much less an increase as bullish as that announced by US Steel. For now, US domestic API X42 ERW line pipe spot prices are unchanged from last week and are still in the range of $66.00-$67.00 cwt. ($1,455-$1,477/mt or $1,320-$1,340/nt) ex-mill. US domestic J55 ERW OCTG casing spot prices have also stayed neutral since last week and are within the $66.00-$67.00 cwt. ($1,455-$1,477/mt or $1,320-$1,340/nt) ex-mill range.
If US domestic OCTG casing prices do go up, so will import offer prices, which fell throughout late May and June on low US-buyer interest. With price uncertainty still a factor in the US domestic market, US buyers are turning to domestic producers for immediate needs, but import offers are substantially lower. Korean mills are still offering API X42 ERW line pipe to the US in the range of $49.00-$50.00 cwt. ($1,080-$1,102/mt or $980-$1,000/nt) DDP loaded truck in US Gulf ports, with Taiwanese line pipe offers just above. Korean and Taiwanese OCTG casing offers have not moved either in the last week and still range from $53.50-$54.50 cwt. ($1,179-$1,202/mt or $1,070-$1,090/nt) DDP loaded truck in US Gulf ports.