With standard pipe exports to the US now out of the question, Chinese pipe mills are still sending plenty of line pipe to the US. But due to the rising Chinese prices and the strong US demand for line pipe from the robust energy sector, these imports are not causing too much concern.
Offering prices for Chinese X42 line pipe have increased by approximately $1.00 cwt. in recent weeks, with most offers for pipes 2" to 8" in diameter still in the range of $34.00 cwt. to $36.00 cwt. ($750 /mt to $794 /mt or $680 /nt to $720 /nt) FOB loaded-truck in Houston.
Due to the recent backlash against Chinese products, there are some quality concerns among customers, though not nearly to the extent of the concerns and complaints seen on the square and rectangular tubing side. Still, some customers are wary.
One pipe trader told SteelOrbis this week, "We're getting a lot of people telling us they want made in America, or made by US, Japan or Germany."
Since the AD/CVD actions against Chinese standard pipe are expected to be successful, either in the form of tariffs or a suspension agreement, there is also talk of a similar case being levied against Chinese line pipe and OCTG, though injury would be hard to prove as domestic API pipe makers are still seeing strong profits.
Data from the American Iron and Steel Institute (AISI) show that imports of carbon steel line pipe, YTD August 2007, totaled 1,499,368 nt, only slightly under the total amount of carbon steel line pipe imports for all of 2006 which came to 1,636,983 nt. China was the main source, shipping 340,737 nt to the US YTD August, compared to 408,882 nt in all of '06. YTD August, other major import sources for line pipe were: South Korea, India, Italy, Japan, and Greece.
For standard pipes, no low-priced import source has yet to take China's place. There is interest in developing new sources though, so some traders are reportedly doing small import deals in order to get their foot in the door with sources like India. Still, standard pipe imports have a long way to catch up before they'll be competitive -- even line pipe offers from China are cheaper than standard pipe offers from any other region.
Domestic demand for standard pipe, which comes mostly from the construction industry, is steady but is still down year on year because of the faltering residential construction sector and the general slowdown of the economy. Inventories are getting leaner, but they are still sufficient to meet demand, and there is no hurry to buy imports just yet.
The domestic pricing trend for standard pipe remains flat, with most A53 offers continuing to range from $42.00 cwt. to $44.00 cwt. ($926 /mt to $970 /mt or $840 /nt to $880 /nt) ex-mill.
Buyers tell SteelOrbis that they do not expect any more domestic price increases for the duration of the year, as demand is flat, and while flat rolled prices are trending slightly up, they are not rallying upwards by any means. Price increases are expected, however, for early first quarter. With imports out of the picture, and more domestic producers focusing on the more lucrative API pipes, buyers say that A53 pipes are in a good position to see some solid price increases in 2008, starting in January.
AISI data show that standard carbon steel pipe imports YTD August 2007 totaled 1,030,220 nt, compared to 1,592,766 nt of standard pipe imports in 2006. YTD August 2007, China was by far the largest source, with 589,858 nt. By comparison, in all of 2006 China sent a total of 673,726 nt. The only other major import source for standard pipe YTD August was Canada, with 259,310 nt.