The US energy pipe market continues to move along at a steady pace, but purchasing activity is far from robust, and buyers are in no hurry to place orders.
Overall demand levels in the US energy pipe market have been steady throughout Q2 so far, with a few bumps and dips along the way. US oil rig counts dropped by six last week; but after gains of 64 rigs in the prior three weeks combined, there isn't much concern over the decrease. What buyers are worried about, however, are falling US domestic spot prices on hot rolled coil (HRC), which have many on edge as to when decreases in flat-rolled prices will begin to spill over into the electric resistance weld (ERW) pipe market.
According to some buyers of API X42 ERW line pipe, mills have been more willing to "discuss" spot prices in the last couple weeks-currently at $66.50-$67.50 cwt. ($1,466-$1,488/mt or $1,330-$1,350/nt) ex- mill-and have been increasingly inclined to consider deals for significant tonnages. But so far, no major price cutting is evident.
In the J55 ERW oil country tubular goods (OCTG) casing market, mills do not appear ready to cut deals below the spot range of $66.00-$68.00 cwt. ($1,455-$1,499/mt or $1,320-$1,360/nt) ex-mill, unchanged from our last report two weeks ago. OCTG remains a strong market both US domestically and offshore, and so when energy pipe spot prices do begin to decline-likely in late Q2-line pipe prices may fall faster than spot prices for OCTG.
As for imports, buyers of imported energy pipe have not been rushing to place orders either, but even interested parties are finding available offers scarce. Import activity has been relatively quiet in the past couple weeks, although offers from Taiwan and Korea are still available. Taiwanese offers of API X42 ERW line pipe are still $53.50-$54.50 cwt. ($1,179-$1,202/mt or $1,070-$1,090) duty-paid FOB loaded truck in US Gulf ports-unchanged from early May. Korean offers have been heard below Taiwanese prices, with most offers in the range of $52.00-$53.00 cwt. ($1,146-$1,168/mt or $1,040-$1,060/nt) duty-paid FOB loaded truck in US Gulf ports.
J55 ERW OCTG casing sales prices from Taiwan and Korea have not changed since early May and are still in the range of $57.00-$58.00 cwt. ($1,257-$1,179/mt or $1,140-$1,160/nt) duty-paid FOB loaded truck in US Gulf ports.