Sources within the US domestic API X-52-line pipe market say that slow order activity, soft rig counts and less-than-desirable oil prices have market players feeling pessimistic.
“The steel market is pretty bad on our end,” a service center source said. “Prices seemed to keep dropping, but at least now, it’s steady after continuous drops. We’re losing money on our inventory and I hope we hit bottom on prices, soon because it’s pretty much a bloodbath on our stock at this point.”
Two weeks ago, prices were being heard in the range of $56-$59 cwt. ($1,235-$1,301/mt or $1,120-$1,180/nt), ex-mill, with discounts available for volume buyers. This week, however, prices have fallen sharply.
The current price range for domestic API X52 line pipe is trending between $52-$53 cwt. ($1,146-$1,168/mt or $1,040-$1,060/nt), ex-mill, although one source reported “we’ve heard of a few mills going very close to $50 cwt. ($1,102/mt or $1,000/nt) to book orders.”
Another source lamented over the state of the market.
“It’s crazy to think this is the boomerang effect of the tariffs – artificial manipulation of the markets has short term ‘positive’ effects for those who set them in place, but also have likely mid to long-term negative effects on the industry,” they said. “We’d be doing much better if the tariffs had not altered the market. Of course, I’m sure none of the domestic mills will take responsibility for creating overcapacity and dropping prices, when the demand was artificial to begin with (only due to people buying in advance due to increasing prices). I expect the second half of this year will be poor on the sales side.”