Pipe bookings in the US market have been less frequent and less consistent over the last six to eight weeks. This combined with current softening flat rolled coil prices has lead to greater flexibility with most pipe spot market prices.
US domestic pipe producers have been trying to hold prices as firm as possible; however, with customer knowledge of softening hot rolled coil (HRC) prices (currently as low as $26.50 cwt. / $584/mt / $530/nt ex-mill) combined with buyers attempting to keep end-of-year inventory levels as low as possible for tax purposes, producers have become more flexible in negotiating, even on some deals that may not be considered "significant" tonnage.
In previous years, this market situation would favor offshore sources supplying product into the first quarter. But most buyers are still too hesitant to book imports due to US domestic price and inventory level uncertainty. Although domestic prices could stabilize over the next month, ports have been receiving an abundance of tonnage from overseas over the last couple months. According to the US department of commerce, 241,395 mt and 237,141 mt (census data) of oil country tubular goods (OCTG) arrived to the US during July and August respectively, while another 199,183 mt (license data) arrived in September. Meanwhile, only 27,767 mt was imported in September 2009.
These increasing import arrivals have damaged the confidence of buyers who may have been on the fence of whether to buy import product for first quarter arrival. Although ports are not likely to swimming in excess product from incomplete years like the first half of 2009, buyer mentality is less than eager to take a chance.
Current offers on electric resistance welded (ERW) black plain end (BPE) A53 Grade A standard pipe from Dubai range from approximately $42.00 cwt. to $43.00 cwt. ($926/mt to $948/mt or $840/nt to $860/nt) duty-paid, FOB loaded truck in US West Coast ports; however, some traders have concluded deals at about $1.00 cwt. ($22/mt or $20/nt) below this range.
Traders have also been able to negotiate deals on ERW galvanized plain end (GPE) A53 Grade A from India at approximately $48.50 cwt. to $49.50 cwt. ($1,069/mt to $1,091/mt or $970/nt to $990/nt) duty-paid, FOB loaded truck in US Gulf ports, while spot deals for the same product from Dubai are about $1.50 cwt. ($33/mt or $30/nt) higher.
Meanwhile, most Korean pipe offers into the US have been removed from the market due to market conditions. Most Korean mills are worried that in order to have a chance of booking deals to the US that they could be risking antidumping (AD) violations, so they are staying away for the time being until more stability in the market emerges.