Most
pipe professionals concur the domestic ERW
pipe market has peaked, and the pricing trend should remain flat for the remainder of the year.
Standard
pipe consumption from the
construction sector is still moderately strong, but the flat rolled market has stopped going up, and the US economy is in a period of slowdown. The
construction sector has started to slow down also, therefore less water and gas pipes will be needed for new building
construction. In July, the market was still red-hot, and August increases were anticipated, but it appears that any attempts by domestic mills to raise prices were met with resistance. Demand has softened somewhat in the last month, but it is still decent enough to keep prices stable, most likely for the next few months.
Current domestic offers for A53 standard
pipe (used primarily for water and low-pressure gas pipes) in the market range from $47.00 cwt. to $48.00 cwt. ($1,036 /mt to $1,058 /mt or $940 /nt to $960 /nt).
While the trend for standard pipes has flattened out, the energy sector is still booming, and thus, and with multiple drilling projects planned for the coming year, demand for OCTG and line pipes will remain strong. The North American rig count for the week ended August 11, 2006 was 2208, up from 2191 the previous week, and up from 2008 for the same week the previous year. High oil prices are expected for the next few years, and this robust business cycle should last for a few years.
The import pricing trend for standard
pipe is still slightly down, as Chinese flat rolled prices have plummeted, bringing
pipe offers down with them. However, there are signs that the price erosion for flat rolled has now slowed down, and price decreases for
pipe will only be moderate.
There are some pipes coming from
Japan,
Turkey,
Korea, and
UAE, but for the most part,
China is dominating the import market with their bargain priced, small diameter pipes. Market watchers say that
India is also playing a larger role in the
pipe market than they had been in the past, exporting an increasing amount of OCTG pipes.
This week, the US Department of Commerce announced that the two antidumping orders restricting standard
pipe imports from
Taiwan will continue. Therefore, we will not be seeing much Taiwanese imports for a while, and the Chinese will continue to dominate the US import market. The next sunset review for these orders will take place in July 2011.
Chinese offers for A53 standard
pipe have decreased by about $30 /nt ($1.50 cwt. or $33 /mt) in the past two weeks, now ranging from $580 /nt to $620 /nt ($29.00 cwt. to $30.00 cwt. or $639 /mt to $661 /mt) FOB loaded-truck, Houston, Texas. Offers for sizes larger than 8” diameter from
China have decreased by about $20 /nt ($1.00 cwt. or $22 /mt) in the past two weeks, and are now going for approximately $680 /nt to $720 /nt ($34.00 cwt. to $36.00 cwt. or $750 /mt to $794 /mt) FOB loaded-truck at West and Gulf Coast discharge ports. Chinese line
pipe offers range from approximately $700 /nt to $750 /nt ($35.00 cwt. to $37.50 cwt. or $772 /mt to $827 /mt).