Prices within the US domestic and import API X-42 electric resistance weld (ERW) line pipe markets continue to show signs of correction; as of late Wednesday, some oil industry experts have begun to predict oil barrel prices could fall below $40. Inventories are at an 80-year high, according to market sources, and while demand for oil is still pretty good “it’s definitely not where it needs to be.”
Offshore prices from Taiwanese and Vietnamese producers have narrowed by about $1.00 cwt. ($22/mt or $20/nt) on the top end since our last report a week ago, bringing the current futures range to $35-$36 cwt. ($772-$794/mt or $700-$720/nt), DDP loaded truck in US Gulf coast ports, although sources close to SteelOrbis say they’re already starting to receive bids at slightly below that range. Korean producers may soon reemerge within the market with offer prices in a comparable range, as the US Department of Commerce announced a negative preliminary determination in the countervailing duty (CVD) investigation in the current line pipe trade case.
US domestic spot prices, however, have the appearance of holding sideways, still at approximately $48-$49 cwt. ($1,058-$1,087/mt or $960-$980/nt), ex-Midwest mill, although at this point, most mills are asking customers what they’re able and willing to pay, and if it works with mills’ input costs, they’re open to making deals. “Things are still pretty hairy out there,” according to one Midwest-based source. “There’s a lot of high-priced inventory that’s out there to the extent that the people who are breaking even can consider themselves to be lucky.”