Demand and activity for pipe into the US has managed to keep a relatively steady pace into the second quarter despite escalated price announcements from foreign mills.
The ongoing price increases for raw materials have caused some US pipe buyers to express concern about the sustainability of pipe prices should the significant-monthly-increase trend continue into the third quarter; however, demand in the energy pipe market continues to be the healthiest of any steel product, and even standard pipe demand is experiencing some steady improvement.
The most competitive foreign source offering API J55 electric resistance welded (ERW) oil country tubular goods (OCTG) to the US remain out of Korea. Most Korean spot offers have increased by approximately $2.00 cwt. ($44/mt or $40/nt) since our last report two weeks ago and are currently be found in the range of about $52.00 cwt. to $54.00 cwt. ($1,146/mt to $1,200/mt or $1,040/nt to $1,080/nt) duty-paid, FOB loaded truck in US Gulf ports. The current range reflects an increase of approximately $7.00 cwt. ($154/m totr $140/nt) from early last month. Some deals may still be found below the current range but will most likely no longer be available by the end of the week, once the most recent scrap surcharges begin to take effect. According to license data from the Steel Import Monitoring and Analysis System (SIMA), the US imported 139,790 mt (32,533 mt from Korea and 26,941 mt from Canada) of OCTG during March, which is a drastic increase from the 77,606 mt (preliminary census data) reported in February. Furthermore, OCTG imports are expected to continue to generate interest due to the continued increase in rig counts. According to the most recent report by Baker Hughes, the number of total active US rig counts for week ending April 1 was 1,465. This is an increase of 58 rigs from four weeks ago, and an increase of 245 rigs from the first week in January. It is also an increase of 422 rigs from the same period last year.
Meanwhile, imported electric resistance welded (ERW) black plain end (BPE) A53 Grade A standard pipe demand has been steadily increasing over the past several weeks, albeit at a slower pace than OCTG. After significant price increases were established a little over two weeks ago, the most competitive offshore offers from Korea and Turkey have remained mostly neutral. Most Turkish BPE standard pipe offers continue to range from approximately $45.00 cwt. to $46.00 cwt. ($992/mt to $1,014/mt or $900/nt to $920/nt) duty-paid, FOB loaded truck in US Gulf ports, while Korean offers are still gaining attention at the level of around $46.50 cwt. to $48.00 cwt. ($1,025/mt to $1,058/mt or $930/nt to $960/nt) duty-paid, FOB loaded truck in US Gulf ports.
Furthermore, Indian mills came out with new standard pipe prices to the US, after pulling all offers during the time of our last report. Indian BPE standard pipe offers have surfaced, ranging from approximately $45.00 cwt. to $46.00 cwt. ($992/mt to $1,014/mt or $900/nt to $920/nt) duty-paid, FOB loaded truck in US Gulf ports, while its standard galvanized plain end (GPE) offers may now be found at around $52.00 cwt. to $53.00 cwt. ($1,146/mt to $1,168 or $1,040/nt to $1,060/nt) duty-paid, FOB loaded truck in US Gulf ports, representing a $5.00 cwt. ($110/mt or $100/nt) increase from earlier last month.
Licensing data from SIMA indicate that after standard carbon steel imported tonnage slightly increased from February to March, at 43,210 mt (preliminary census data) and 45,931 mt respectively. After Canada, at 16,868 mt, the next top four importers to the US in March were Korea, at 4,354 mt; India, at 3,990 mt; Mexico, at 3,744 mt; and Japan, at 3,181 mt.