With recent hot rolled coil (HRC) increases being rolled out both domestically and internationally, it's not surprising that structural standard pipe mills have followed suit, pushing offer prices higher since our last report two weeks ago. However, the instability of current HRC price levels combined with overproduction has created hesitant pipe buyers and led to mills being less aggressive.
Although the domestic structural standard pipe sector has remained quiet through most of the summer, activity has been consistent and spot prices have remained similar to most mill offers. Domestic electric resistance welded (ERW) black plain end (BPE) A53 Grade B standard pipe offers increased, on average, $1.00 cwt. ($22/mt or $20/nt) over the past two weeks, and average spot orders are now ranging from approximately $50.00 cwt. to $52.00 cwt. ($1,102/mt to $1,146/mt or $1,000/nt to $1,040/nt) ex-mill.
While there is some concern that prices could fall again in the near term, any sort of decrease is not expected to be as drastic as those which potentially could be seen for HRC. Domestic structural pipe inventory levels have remained lean, and there have not been any spikes in import arrivals from offshore sources. According to the US department of commerce, 18,486 mt (license data) of imported structural pipe and tube tonnage had been recorded for the month of August (through August 24), which is on par with the 21,937 mt (preliminary census data) which arrived in July. Nevertheless, even the slightest potential for soft prices will cause alarm for buyers, especially as the end of the year is nearing and the necessity for more tonnage is lessening.
Regarding import offers, Korean mills are offering ERW BPE A53 Grade B standard pipe for approximately $46.50 cwt. to $48.50 cwt. ($1,025/mt to $1,069/mt or $930/nt to $970/mt) duty-paid, FOB loaded truck in US Gulf ports. Although Korean mills have offered some ERW BPEA53 Grade A earlier in the summer, their concentration has reverted back to Grade B and oil country tubular goods (OCTG). Tawain, even after increasing offers another $1.00 cwt. ($22/mt or $20/nt) over the past two weeks, is offering structural Grade B within a more attractive range than the Koreans at about $45.50 cwt. to $47.00 cwt. ($1,003/mt to $1,047/mt or $910/nt to $950/nt) duty-paid, FOB loaded truck in US Gulf ports.
On the ERW BPE A53 Grade A side, the most attractive offers are currently being generated from South Africa and Turkey, at approximately $43.00 cwt. to $45.00 cwt. ($948/mt to $992/mt or $860/nt to $900/nt) duty-paid, FOB loaded truck in US Gulf ports; however, Turkish offers are trending within the middle to higher end of the range. Taiwanese mills also continue to be active offering Grade A, but at a higher clip of around $44.50 cwt. to $46.50 ($981/mt to $1,025/mt or $890/nt to $930/nt) duty-paid, FOB loaded truck in US Gulf ports.