US energy pipe prices “all over the map”

Friday, 23 October 2020 20:35:29 (GMT+3)   |   San Diego
       

Spot market prices for US domestic J55 ERW casing and API X-52 line pipe are “all over the map,” sources note, adding that while in-stock inventory for both products is being sold “somewhere in the range of $40.00-$42.50 cwt. ($882-$937/mt or $800-$850/nt), replacement costs are “at least $5.00 cwt. ($110/mt or $100/nt) higher.”

“As an example, we bid a project last month based on material costs, and this month, the cost of the project has risen by $500,000, solely based on the fact that the cost of pipe has gone up,” a source said.

A second source agreed, pointing that mills’ higher input costs, due to firm HRC and scrap prices, are driving energy pipe prices up as well.

“HRC prices have remained strong and although some people think that prices will start to correct sooner than later, others think [HRC prices] could ride this wave into Q1 of next year,” a source said. “As you can imagine, OCTG and line pipe replacement costs have gone up, but sales prices at the service center level are still lagging based on weak demand.”

Another source agreed.  “The offshore mills are trying to raise prices but that’s not getting a lot of traction because there are still plenty, and I mean, plenty, of cheap spot [market] material available. Hopefully, this will clear up soon and prices will begin to stabilize, because the spread between where material is being sold on the spot market versus replacement cost doesn’t make a lot of sense.”


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