US line pipe market still holding steady

Friday, 11 January 2019 01:14:18 (GMT+3)   |   San Diego
       

The US line pipe market has continued to hold stable, although many within the US have started to question whether downward pricing pressure in the scrap and HRC markets will eventually spill over to line pipe.

There has also been some concern about volatile oil prices and their impact on the US rig count. Today, Brent crude futures were recorded at $60.35 per barrel, while US West Texas Intermediate crude was trading at $51.52 per barrel.

One source in the Southern US noted that while the OCTG market is impacted first, dips in demand will eventually hit line pipe distributors.  “There’s always a bit of a time lag on this, but we expect to see it as time moves on,” the source said, noting that as prices move down, there may be many distribution cetners that will still be stocking higher-priced inventory."

For now, domestic spot market prices for API X-52 line pipe are still trending in the range of $64-$67 cwt. ($1,411-$1,477/mt or $1,280-$1,340/nt) ex-mill, while offers from Mexican mills are still being heard at $62.50-$65 cwt. ($1,378-$1,433/mt or $1,250-$1,300/nt), FOB Texas.

In terms of Section 232, the Trump administration continues to be pressured by elected officials in Mexico, who want the 25 percent steel tariff to be removed in advance of ratifying the new USMCA trade deal. Although it’s still largely speculated that US government officials will be negotiating import quotas with a number of impacted countries, the administration is currently being very silent in terms of possible negotiation dates and/or deadlines.

 


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