As price uncertainty grows in the US domestic energy pipe market, interest in imports has slowed, resulting in some offshore mills lowering their offer prices for export.
US domestic spot prices for API X42 electric resistance weld (ERW) line pipe and J55 ERW oil country tubular goods (OCTG) casing have not moved much in the last week, with the most commonly reported transaction prices for both still hovering in the range of $66.00-$67.00 cwt. ($1,455-$1,477/mt or $1,320-$1,340/nt) ex-Midwest mill. But the trend has been pointing downward since early May as the US domestic flat-rolled market is still struggling with falling spot prices, so US Steel may have to wait until late Q3/early Q4 before it can even collect a part of its $7.50 cwt. ($165/mt or $150/nt) increase on OCTG products, announced last week.
Another key factor impacting domestic energy pipe prices is US rig counts, which had been strong throughout March and April, but have shown a noticeable slowdown in May and June. In March, the US rotary rig count rose by 77 (including the first day of April), and rig counts were up 42 throughout April. But in May, rig counts rose a total of 29 rigs and have only increased by 13 so far in June (as of June 17). And so, industry insiders predict that domestic energy pipe spot prices may have to fall in the summer before trending back up this fall.
On the import side, traders tell SteelOrbis that there have been fewer bookings of imports in the last few weeks as there is widespread doubt that current US energy pipe prices are sustainable through the typically slower summer months. Amid lower US-buyer interest, offshore mills have reduced their offer prices to the US in order to be more competitive. API X42 ERW line pipe offers from Korea have fallen about $3.00-$4.00 cwt. ($66-$88/mt or $60-$80/nt) since mid-June to the range of $49.00-$50.00 cwt. ($1,080-$1,102/mt or $980-$1,000/nt) DDP loaded truck in US Gulf ports. Taiwanese line pipe offers are just above Korean offers by $0.25-$0.50 cwt. ($6-$11/mt or $5-$10/nt). Korean and Taiwanese J55 ERW OCTG casing prices for the US have fallen as well, and are down $1.50 cwt. ($33/mt or $30/nt) since last week to $53.50-$54.50 cwt. ($1,179-$1,202/mt or $1,070-$1,090/nt) DDP loaded truck in US Gulf ports.