Sources close to SteelOrbis have confirmed that Korea’s previous sideways trend on import pricing for API X-42 electric resistance welded (ERW) line pipe has come to an end. Offers from Korea have softened approximately $3.50 cwt. ($77/mt or 70/nt) since our last report a week ago and are currently being seen in the range of $43.50-$44.50 cwt. ($959-$981/mt or $870-$890/nt) DDP loaded truck in US Gulf ports. Taiwanese offers, though, are unchanged. Offers out of Taiwan are still in the range of $47.00-$48.00 cwt. ($1,037-1,059/mt or $940-$960/nt) DDP loaded truck in US Gulf ports. Sources say there are opportunities to get added deals for large-volume buys, but customers are currently too hesitant to make purchases which would have them taking possession of mass quantities of product just before the close of 2012, especially in Harris County, Texas, where there is a 3 percent charge on year-end inventories. As one trader said, “No one wants to sign up to pay that tax.”
Shifting focus to the domestic market, US domestic API X-42 ERW line pipe spot prices remain unchanged since our last report a week ago. SteelOrbis sources have confirmed that prices continue to be seen in the range of $57.00-$59.00 cwt. ($1,257-$1,300/mt or $1,140-$1,180/nt) ex-Midwest mill, but there are signs the market is picking up. According to the most recent rotary rig count report by Baker Hughes, US oil rig counts have seen another week-on-week increase. Many see this as a positive, especially in light of decreases during July. As of August 10, the current number of rigs drilling for oil is 1,432, which reflects an increase of three rigs week-on-week. Although the domestic line pipe market hasn’t seen any significant increase in activity over the last few weeks, sources cite a belief that if the number of rigs drilling for oil continues to improve, it will certainly be a step in a positive direction.