The pricing trend for import ERW
pipe is still up, though
pipe offers from
China, the largest exporter of
pipe to the US, are not going up at the same rate as their flat rolled prices.
Chinese prices have improved since last month, but not nearly to the extent of the announced flat rolled increases. Still, imported
pipe prices have increased by about $20 /nt ($22 /mt or $1.00 cwt.). Some Chinese mills have refrained from offering, due to the pending VAT decision, but there are still plenty of other mills that take on the VAT risk and keep offering. There are a lot of Chinese mills producing pipes sized 24 inches and smaller, though not for sizes 30 inch and larger.
Chinese offers for A53 standard
pipe are now ranging from $600 /nt to $640 /nt ($30.00 cwt. to $32.00 cwt. or $661 /mt to $705 /mt) FOB loaded-truck, Houston, Texas. Offers for sizes larger than 8” diameter from
China are going for approximately $690 /nt to $730 /nt ($34.50 cwt. to $36.50 cwt. or $761 /mt to $805 /mt) FOB loaded-truck at West and Gulf Coast discharge ports.
Preliminary license data from the US government shows that during the month of May 2006, the top three countries from which the US imported standard
pipe from were:
China, at 41,488 mt;
Canada, at 33,897 mt, and
India, at 7,009 mt.
The top three countries from which the US imported line
pipe from during the same period were:
Japan, at 25,481 mt;
Brazil, at 20,695 mt; and
China, at 18,913 mt.
The top three countries for OCTG imports were:
China, at 42,978 mt;
Germany, at 19,199 mt, and
Russia, at 18,073 mt.
Traditionally a strong player,
Turkey has slowed down their exports to the US market due to high raw material prices in the Black Sea region.
On the whole, the import
pipe market will continue to register some increases in the short term, but in the long term, the market will eventually soften some, along with the flat rolled market.
Domestically, the pricing trend for OCTG and line
pipe is still up, largely due to the booming energy sector. The North American rig count as of the week ended June 16, 2006, was 2113, compared to 1580 rigs one year ago. The rig count also registered an increase since our last report on May 23rd, when the rig count was 1906.
The strong domestic flat rolled market and the upward pricing trend for
scrap are also stabilizing the
pipe market, even though prices are close to all-time highs. Still, we probably won't see any dramatic increases in
pipe prices since flat rolled and
scrap prices are no longer rising steeply.
Consumption and demand for standard, OCTG, and line
pipe is still quite steady.
Interestingly, market experts disagree as to whether supplies are constricted or not. Some believe this to be true, and others think that inventories are building because of the number of imports coming in. The latter
opinion may indeed be valid, but as it stands now, demand in the US is strong enough to absorb much of these imports.
Current domestic offers on the market for A53 standard
pipe range from about $47.00 cwt. to $48.00 cwt. ($1,036 /mt to $1,058 /mt or $940 /nt to $960 /nt), however, mills emphasize
production of value-added grades, such as API, for better returns, leaving the cheaper, lower grades to the import market.