With Chinese pipe makers now facing antidumping and countervailing duty investigations on welded line pipe in addition to the standard pipe cases, China remains the focus of much scrutiny in the US pipe market.
The US ITC has initiated the investigation into these pipes, based on the petition filed by US Steel, Maverick Pipe and Tex-Tube, though there is still a lot of uncertainty about whether the US producers will be successful in proving injury. Although the preliminary dumping margins for the standard pipe case indicate that the Chinese mills will have to pay some pretty hefty penalties, the line pipe case is not believed to be such a "slam dunk" since US line pipe makers are making record profits from the booming energy sector's demand for this type of pipe.
In the short term, the line pipe case filings are likely to cause a temporary surge of these imports, followed by a period of inactivity, though the outcome of the cases will ultimately be the determining factor of whether these low-priced Chinese line pipe imports will disappear from the US pipe market in the long term.
Booking prices for Chinese API X42 line pipe in recent weeks have ranged from approximately $48.50 cwt. to $49.50 cwt. ($1,069 /mt to $1,090 /mt or $970 /nt to $990 /nt) FOB, loaded truck in US Gulf ports. Although these prices are trending up due to the rising flat rolled prices in China, these numbers are notably much cheaper than even standard pipe prices from any other source, so it is not hard to see why the US pipe makers may see these prices as a threat. Traders say, however, that there has been a lack of new Chinese offers of any kind of pipe as of late due to the scarcity of coils as well as the antidumping scrutiny.
As far as welded standard pipe imports are concerned, the main source in recent months, India, has been largely absent from the market due to the lack of hot rolled coils in the region. Mills are still shipping old orders, but are said not to be booking any new tonnage.
Traders say the main import sources currently offering A53 BPE pipes to the US are East Asian countries including Malaysia, South Korea, Taiwan, and Indonesia, with prices ranging from approximately $63.25 cwt. to $65.50 cwt. ($1,394 /mt to $1,444 /mt or $1,265 /nt to $1,310 /nt) FOB loaded truck on the West and Gulf coasts.
In general, welded standard pipe imports remain scarce due to the rising costs of flat rolled worldwide, and of course, due to China's absence from the market, thus lending strength to the US' domestic pipe market. Although end-use demand for A53 pipes is not too strong, domestic supply is not large enough to meet the domestic demand, and so the market remains tight. Customers say they want to buy but are not able to get as much pipe as they need due to the lack of import availability. And with flat rolled prices in the US zooming upwards, major price increases are in store for domestic pipes.
In the last two weeks, domestic spot prices for A53 BPE pipes have risen significantly to reflect the rising flat rolled prices, although still not all of the flats price increases have been passed along to pipe yet. Major domestic pipemakers IPSCO and US Steel announced this week that their welded standard pipe prices will rise by $200 /nt ($220 /mt or $10.00 cwt.) and $250 /nt ($276 /mt or $12.50 cwt.) respectively, effective immediately, and other mills are sure to follow with similar price increases to recover their flat rolled costs as well.
Most domestic offers currently range from $59.00 cwt. to $61.00 cwt. ($1,301 /mt to $1,345 /mt or $1,180 /nt to $1,220 /nt) FOB mill, though once domestic mills' new price increases are absorbed, prices should rise a whopping $10.00 cwt. to $12.50 cwt. higher than this level.