Pressure has been building on the US domestic API X-42 electric resistance welded (ERW) line pipe market for the last couple months amid high import arrivals and a softening raw materials market. In particular, weakening domestic scrap and flat rolled prices are impacting prices for line pipe, even though a surprisingly steady oil rig count is keeping demand stable. Consequently, while spot prices are still generally in the range of $61.00-$62.00 cwt. ($1,345-$1,367/mt or $1,220-$1,240/nt) ex-mill, activity continues to be heard under the range, particularly for large drilling projects. Sources tell SteelOrbis that some mills have been extremely aggressive with some projects, dropping prices to be competitive with imports. Overall, because the rig count is trending stable to up and buyers are keeping inventories lean, there is still consistent buying activity, whether at domestic mills or from traders' position tons.
As for imports, the summer slowdown appears to have hit the line pipe market early, and the month of May has been quieter than many traders expected. While prices from Korea and Taiwan remain attractive, the lack of activity could push prices, which currently unchanged in the range of $47.00-$48.00 cwt. ($1,036-$1,058/mt or $940-$960/nt) DDP loaded truck in US Gulf ports, down in the next couple weeks. However, any declines are likely to be temporary, and once offshore lead times move into the New Year, activity is anticipated to quickly pick up.