Last week, SteelOrbis sources reported a sluggish stall in terms of order activity and inquiries for API X-42 line electric resistance welded (ERW) line pipe. This week however, other sources are reporting their business has become a whirlwind, saying they’ve booked “exceptional volumes” in the past 10 days. The orders aren’t for immediate delivery, however; everything is set to arrive after the New Year. But for the line pipe market, although they were “bracing for the worst” in light of falling oil prices, what they’ve seen is quite the opposite of what they expected.
“Drilling projections have definitely fallen off,” according to one Midwest-based source, noting that at least one project they were involved with has fallen by nearly 75 percent. At the same time, that’s not to say that contract-orders are being cancelled and pipe is going to collect dust in the yards. “There is always the chance that these rigs will still be built, but will sit idle until oil prices start to turn around.” With this assumption, the line pipe market could very well trend sideways for several more weeks before starting to taper off; on the other hand, many believe the markets are simply too volatile at this point to make any firm call.
In terms of pricing,
US domestic spot market prices have remained sideways since our last report a week ago, still at approximately $51.00-$52.00 cwt. ($1,124-$1,146/mt or $1,020-$1,040/nt) ex-Midwest, although deals slightly below that range may be available on larger orders.
Futures offers from Taiwanese mills have remained steady, in the approximate range of $38.50-$39.50 cwt. ($849-$871/mt or $770-$790/nt), while Vietnamese prices are still being seen roughly $0.50 cwt. ($11/mt or $10/nt) above the Taiwanese range, all DDP loaded truck in
US Gulf Coast ports. Indian offer prices have also held steady in the previously reported range of $41.50-$42.50 cwt. ($915-$937/mt or $830-$850/nt), DDP loaded truck
US Gulf coast ports. And lastly, as in previous weeks, third-tier Korean mills continue to quote in the approximate range of $41.00-$42.00 cwt. ($904-$926/mt or $820-$840/nt), while first-tier Korean producers’ asking prices are still trending as much as $3.00 cwt. higher.