Despite overall US pipe buying activity remaining neutral to even slightly down since our last report two weeks ago, most domestic and foreign mills continue to push the envelope for higher prices.
The energy pipe sector, specifically oil country tubular goods (OCTG), continues to lead the US pipe market in regards to price, demand, and activity; although over the past several weeks the majority of the activity is now being concentrated on domestic US mills. Offshore mills had been quite active in the US pipe market since the beginning of this year, largely led by hedge-buyers who predicted the early season price surge. But considering how high prices have already escalated (approximately $10.00 cwt. ($220/mt or $200/nt) since early January and the most recent volatility of scrap prices, buyers are increasingly hesitant to invest in any future product arriving from overseas, especially when it will likely not arrive until August.
As a result, most domestic API J55 electric resistance welded (ERW) OCTG mills are trying to take advantage of their strengthened position. Most current domestic OCTG spot deals are being conducted within the approximate range of $62.00 cwt. to $63.00 cwt. ($1,367/mt to $1,389/mt or $1,240/nt to $1,260) ex-mill; however, distributors have already been notified that there could be another push of about $3.00 cwt. ($66 cwt. or $60/nt) on the very near horizon.
Meanwhile, the most attractive import OCTG offers continue to be seen from Korea. Most Korean spot offers have increased approximately $2.00 cwt. ($44/mt or $40/nt) over the past couple weeks and now range from around $57.00 cwt. to $58.00 cwt. ($1,257/mt to $1,279/mt or $1,140/nt to $1,160/nt) duty-paid, FOB loaded truck in US Gulf ports. Korean OCTG offers are also rumored to be climbing an additional $3.00 cwt. ($66/mt or $60/nt) or so in the coming weeks despite their declining activity.
According to license data from the Steel Import Monitoring and Analysis System (SIMA), the US imported 147,902 mt of OCTG during April, which is a slight decrease from the 150,427 mt reported in March. Imported tonnage of OCTG from Korea to the US dipped from 32,533 mt to 27,305 mt from March to April.
Looking at the less dominant energy pipe market, API X42 ERW line pipe offers from Korea are recently being seen at approximately $52.00 cwt. to $53.00 cwt. ($1,146/mt to $1,168/mt or $1,040/nt to $1.060) duty-paid, FOB loaded truck in US Gulf ports. Mexican offers of the same product are currently ranging from about $56.00 cwt. to $57.00 cwt. ($1,235/mt to $1,257/mt or $1,020/nt to $1,040/nt) delivered ito Houston. While line pipe activity has been considerably lower than that of OCTG, traders contend that the line pipe market may be faring better than many believe, just because OCTG has been making all the headlines this year. With that being said, line pipe imports are also losing ground due to extended lead times.
Shifting focus to the standard pipe market, most imported electric resistance welded (ERW) black plain end (BPE) A53 Grade A standard pipe offer prices have trended neutral, while booking activity may have waned a bit over the past two weeks. Most Turkish and Indian BPE standard pipe offers continue to be found ranging from approximately $47.00 cwt. to $48.00 cwt. ($1,036/mt to $1,058/mt or $940/nt to $960/nt) duty-paid, FOB loaded truck in US Gulf ports, while Korean offers are trending a little higher at around $48.00 cwt. to $49.00 cwt. ($1,058/mt to $1,080/mt or $960/nt to $980/nt) duty-paid, FOB loaded truck in US Gulf ports. On the coated side, Indian standard galvanized plain end (GPE) offers are currently being found anywhere from $57.00 cwt. up to $60.00 cwt. ($1,257/mt to $1,323/mt or $1,140/nt to $1,200/nt) duty-paid, FOB loaded truck in US Gulf ports. Indian mills appear to still be the dominant GPE offshore supplier to the US, but many buyers are growing weary of watching the prices escalate every time they pick up the phone despite a slide in activity.