Market experts agree that our prediction made two weeks ago was accurate and that the $40 /nt ($44 /mt or $2.00 cwt.) increase in the domestic
pipe offers has been largely accepted by the market. Domestic offers for A53 ERW
pipe now ranging from $49.00 cwt. to $50.00 cwt. ($1,080 /mt to $1,102 /mt or $980 /nt to $1,000 /nt) ex-mill. Despite the third quarter weakening we have witnessed in other steel products, the domestic market for standard
pipe (used to transmit water and low pressure gas) remains strong due to the bustling energy sector. Though the domestic hot rolled prices have dipped some from their peak levels in August, prices are now stable, so there should not be any drop in
pipe prices for the raw materials side. It is unlikely that prices will register another increase before year-end due to some seasonal softening in demand and growing inventories, but most
pipe professionals predict that the domestic pricing trend will stay steady. The import market on the other hand is still trending slightly down. Inventories are growing, and domestic
pipe demand is not as high for the cheap import grades as it is for the more value-added API grades.
China still leads the import market with its low-priced pipes, made mostly from narrow band coils, which are made from billets instead of slabs. Pipes made with narrow band typically have the size limitation of 6”, and the surface quality could be suspect. Chinese export prices have not softened further in the past two weeks, and there are some reports that hot rolled tags are finally moving up in
China. Some Chinese
pipe mills have been attempting to raise their export prices, but it is too early to see if they will be successful. The more likely outcome is that import standard
pipe prices will follow the worldwide trend of fourth quarter slowdown, and head south. Competitive Chinese offers for A53 standard
pipe still range from $580 /nt to $620 /nt ($29.00 cwt. to $30.00 cwt. or $639 /mt to $661 /mt) FOB loaded-truck, Houston, Texas. Offers for sizes larger than 8” diameter from
China range from $680 /nt to $720 /nt ($34.00 cwt. to $36.00 cwt. or $750 /mt to $794 /mt) FOB loaded-truck at West and Gulf Coast discharge ports. Larger than 8”
pipe is generally made from hot rolled coils made from slabs. Competitive Chinese line
pipe (API 5L X42) offers still range from approximately $700 /nt to $750 /nt ($35.00 cwt. to $37.50 cwt. or $772 /mt to $827 /mt) with larger than 8”
pipe having similar extras. License data from the US import monitor shows that
China is still the top exporter of standard
pipe to the US, exporting a total of 69,010 mt of standard
pipe to the US in August, 2006, followed by
Canada, which exported 25,656 mt.
Mexico,
Spain and
Romania trail behind, exporting 5,687 mt, 2,872 mt, and 2,755 mt, respectively, to the US in August 2006.