Due to the pending antidumping case against Chinese ERW standard pipe imports, most Chinese pipe mills are no longer offering ERW standard pipe to US customers in the sizes included within the scope of the investigation (under 16 inches in diameter).
Very few importers are still offering Chinese ERW standard pipe to the US at sizes under 16 inches, particularly for A53, A500 or A252 grades, as the US ITC is expected to find an affirmative injury determination, which will allow the US DOC to continue its antidumping and countervailing duty investigations. However, there is a slight chance that the commission will issue a negative injury determination, dropping the case. This critical decision will be made on July 20, 2007.
The pricing trend for import ERW standard pipe is now strongly up, since the pending antidumping case will most likely wipe out the cheap Chinese imports for a while, leaving room for higher priced competition to enter the market. These pipes could be from a number of countries, such as Malaysia, Thailand, or even Turkey. Data from the US Import Monitor show that year-to-date through May, the US' top import sources for standard pipe, aside from China, which is by far the main source at 273,138 mt, are: Canada, at 146,657 mt; Mexico, at 22,536 mt; Thailand, at 18,015 mt; Taiwan, at 13,678 mt; and Korea, at 10,160 mt.
While the standard sized ERW standard pipe import offers are now extremely rare, import offers of larger sized Chinese ERW standard pipe (16 inches to 24 inches in diameter - sizes not included in the antidumping petition) are still available, now ranging from $690 /nt to $730 /nt ($761 /mt to $805 /mt or $34.50 cwt. to $36.50 cwt.) FOB loaded-truck, Houston.
Meanwhile, the pricing trend for API pipe imports is now slightly down because of the increased flow of these products from China. While the line pipe market is still relatively steady, the over-saturation of the US market for OCTG is expected to get even worse due to the anticipated shift in Chinese pipe production from standard to energy pipes not included in the antidumping investigation. While the US hasn't seen the full effect of the shift in production, there is already a problem of inventory buildup of these products in the United States. This situation will likely get worse before it gets any better. However, sources say that if the US pipemakers are successful in curbing the Chinese standard pipe imports, they are likely to target Chinese API pipe next with another antidumping suit.
The US domestic ERW standard pipe market still hasn't felt the positive effects of the antidumping case just yet, as slow demand and falling flat rolled prices have resulted in a decrease in pipe prices in the second quarter. Demand is steady, but sources say the market is still over-inventoried with the cheap import material still on the ground. Still, domestic pipemakers are mostly optimistic that the antidumping case will have its intended effect, curtailing imports and allowing domestic prices to rise, possibly as soon as the third quarter. Imports from old offers are still trickling in, but since no new import standard pipe business is being conducted, the import flow is expected to peter out by next month. For now, the pricing trend for domestic standard pipe remains slightly down.
Market sources say that most domestic offers for A53 ERW standard pipe currently range from $44.00 cwt. to $45.00 cwt. ($970 /mt to $992 /mt or $880 /nt to $900 /nt) ex-mill.
The pricing trend for domestic API pipes is also down due to the aforementioned problem of excess inventory. However, the market for these pipes should manage to stay afloat due to the strong demand from the booming energy sector, as oil prices are on the rise again. The Baker Hughes North American Rotary Hughes Rig Count shows for the work week ended July 13, 2007 a total of 2,151 rigs in North America, compared to 2,038 rigs the previous week, and 2,239 rigs the same week of the previous year.