For most products imports, the US market remains a dry well. Higher import prices, lack of demand, difficulty of finding suitable vessels, and lack of confidence in prices in general, plagues the normally reliable US import market. But there is a glimmer of hope that has appeared out of nowhere. Traders have finally begun to experience some consistent pipe import activity.
As once heavy inventories have been steadily declining, and oil prices show a lot of strength, pipe imports have been re-emerging. The most active pipe and tube import product is oil country tubular goods (OCTG), as rig counts have begun to increase. According to Baker Hughes the total active US rig counts for week ending February 19 equated to 1,345. This is up 125 rigs from the first week in January and reflects an increase of 346 rigs from last September.
The most aggressive import offers of API J55 electric resistance welded (ERW) OCTG are out of Korea, with offers ranging from approximately $43.00 cwt. to $45.00 cwt. ($948/mt to $992/mt or $860/nt to $900/nt) duty-paid, FOB loaded truck in US Gulf ports. These offers reflect an increase of about $1.00 cwt. (22/mt or $20/nt) since our last report in January. License data from the Steel Import Monitoring and Analysis System (SIMA) demonstrates that total import tonnage of OCTG to the US nearly doubled from December 2009 to January 2010, with 50,595 mt (final census data) having been reported December and 97,156 mt reported in January. Korea was the emergent leader in the import market, and reflected an increase in US imports: from 9,403 mt to 28,087 mt over December and January respectively. The once dominant China has been locked out of the market as a result of various antidumping orders.
While OCTG activity has been steadily increasing for the past several months, standard pipe imports have been experiencing an uptick in quoting activity as well. Although actual bookings remain relatively sluggish, traders expect additional deals to materialize over the next several weeks as weather improves and more projects get underway.
The most competitive import ERW black plain end (BPE) Grade A standard pipe offers also continue to be seen out of Korea. Most Korean offers have trended neutral since the beginning of the month and continue to range between $40.00 cwt. to $42.00 cwt. ($882/mt to $926/mt or $800/nt to $840/nt) duty-paid, FOB loaded truck in US Gulf ports. Meanwhile, other sources such as Taiwan and Turkey are actively offering ERW BPE to the US; however, most are at least $1.00 cwt. ($22/mt or $20/nt) higher than Korean offers.
On the coated side, most Indian ERW ASTM A53 galvanized plain end (GPE) standard pipe offers also trended neutral over the past few weeks and continue to be seen 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.
SIMA license data shows that total import tonnage of standard carbon steel pipe increased from 43,124 mt (final census data) in December to 53,546 mt in January. The top four exporters of standard pipe to the US during December were Canada, at 18,714 mt; India, at 8,438 mt; Mexico, at 4,067 mt; and Korea, at 3,911 mt.
Meanwhile, line pipe continues to be the least active primary pipe import product due simply to overwhelmingly sluggish demand. The most aggressive import offers right now for API X42 ERW line pipes are from Korea and Taiwan at around $41.00 cwt. to $43.00 cwt. ($904/mt to $948/mt or $820/mt to $860/nt) duty-paid, FOB loaded truck in US Gulf ports. Still, there appears to be no real urgency to book any import line pipe products.