The effectiveness of the substantial price increase from a number of US domestic standard pipe producers over the last couple weeks is being questioned amid weak demand levels.
Within a few days of US domestic flat-rolled mills announcing a spot price increase of $3.00 cwt. ($66/mt or $60/nt) on August 10 and 11, a number of domestic standard pipe producers began issuing increases of their own for about $4.00 cwt. ($88/mt or $80/nt) based on higher raw material costs. But buyers tell SteelOrbis that while it's no surprise domestic welded standard pipe mills would hike prices in tandem with flats increases--considering pipe spot prices fell alongside flats prices in late-spring and summer--a $4.00 cwt. increase is "overreaching," and how much of the increase may actually be reflected in spot prices is uncertain.
With US domestic standard pipe demand still depressed, whether or not standard pipe spot prices will begin trending up will largely depend on the effectiveness of the domestic flat-rolled price increase; however, in the three weeks since flats mills issued price increases, only about $1.00 cwt. ($22/mt or $20/nt) has actually been reflected in flats spot prices. So for now, domestic electric resistance welded (ERW) black plain end (BPE) A53 Grade A standard pipe spot prices will remain in the range of $47.50-$48.50 cwt. ($1,047-$1,069/mt or $950-$970/nt) ex-Midwest mill--unchanged since falling about $1.50 cwt. ($33/mt or $30/nt) two weeks ago.
Import offer prices to the US have also remained stable in the last week, and traders tell SteelOrbis that Korean and Indian mills are carefully watching the US domestic market to determine whether or not to also raise prices or leave them unchanged. Korean and ERW BPE A53 Grade A standard pipe prices are still in the range of $43.50-$44.50 cwt. ($959-$981/mt or $870-$890/nt) DDP loaded truck in US Gulf ports--showing no movement from two weeks ago, although most orders being placed are on the upper end of the range.