The sentiment within the US domestic and import API X-42 electric resistance weld (ERW) line pipe markets continues to trend bleak, after reports that the domestic oil rig count has dropped to its lowest level in 48 months has begun to permeate the marketplace.
That number has fallen by approximately 43 percent since October of last year, according to analysts, although the US oil output continues to trend at about 8.7 million barrels each day. Between supply outpacing demand (to the tune of about a million barrels a day), and US storage tanks fast-approaching capacity compounded with global economic pressures, US drilling exploration projects are being taken off the table.
Line pipe prices, however, have held mostly stable since an approximate $3.00 cwt. ($66/mt or $60/nt) drop in prices that took place two weeks ago, with prices still holding at $48.00-$49.00 cwt. ($1,058-$1,087/mt or $960-$980/nt) ex-Midwest mill. SteelOrbis sources, though, say that deal-making is rampant. In terms of futures prices, offers from Taiwanese and Vietnamese mills are also steady since our last report a week ago, at approximately $35.00-$37.00 cwt. ($772-$816/mt or $700-$740/nt) DDP loaded truck in US Gulf coast ports. But as with last week, offshore producers are ready and willing to negotiate.