US domestic mills are paying strong attention to significant drops in offshore offerings of API X-42 electric resistance welded (ERW) line pipe. So far this month, Korean offers have dropped by approximately $3.50 cwt. ($77/mt or $70/nt) and Taiwanese prices have declined by about $2.00 cwt. ($44/mt or $40/nt), bringing offer prices to the US to $43.50-$44.50 cwt. ($959-$981/mt or $870-$890/nt) and $45.00-$46.00 cwt. ($992-$1,014/mt or $900-$920/nt), DDP loaded truck in US Gulf ports, respectively. This reflects no change from last week.
US domestic mills may have an API X-42 ERW line pipe list price of approximately $60.00 cwt. ($1,323/mt or $1,200/nt) ex-mill, according to SteelOrbis sources, but that’s not to say orders are transacting at that rate. In fact, sources have confirmed that the most commonly seen range for US domestic spot prices has dropped by about $1.00 cwt. ($22/mt or $20/nt) since our last report a week ago. Spot prices are now being reported at $56.00-$57.00 cwt. ($1,235-$1,256/mt or $1,120-$1,140/nt). One service center buyer, however, has reported making buys at about $3.00 cwt. ($66/mt or $60/nt) below that level, saying that these types of deals are available for those purchasing larger tonnages. Not only are domestic mills scrambling to compete with import pricing, they are also dealing with persistent declines in rig counts. The number of rigs drilling for oil in the US has dropped from 1,425 to 1,408 in the past week, reflecting a 32-month low. Sources say that although line pipe buying activity is steady, it remains light, and this scenario isn’t like to improve until drilling activity picks up.