The US domestic energy industry has been setting new records for oil and gas production, but the one thing that seems to be holding it back is Trump’s tariffs on imported steel. Experts estimate that the industry needs thousands of miles of new pipeline; in June, records show that oil producers drilled more than 1,400 new wells.
Finding affordable energy pipe, however, has been a challenge. And while the US Commerce Department is still reviewing exemption requests, fewer than 300 out of 26,400 requests have been approved. “The tariffs are undermining oil production and the only thing they’re succeeding in doing relates to driving up costs,” one source said. “Toward the end of the year, we believe that pipe prices will remain a bit stronger due to the shortages that are going to be brought on by the Korean quotas, but from what I’ve been hearing in my discussions with Korean mills, they’re itching to get back into the market. They believe that pipe prices are currently peaking so they will likely ship their entire quota allocation for Q1 2019 to arrive in January, which will put further pressure on the market.”
In terms of current import offers, Korean, J55 OCTG casing is being heard in the range of $71.25-$72.25 cwt. ($1571-$1593/mt or $1425-$1445/nt) DDP loaded truck in US Gulf ports, while Taiwanese J55 OCTG casing is being sold to traders at $65-$66 ($1433-$1455/mt or $1300-$1320/nt) DDP loaded truck in US Gulf ports. However, pipe being sold on the spot market is being sold between $2.50-$3.75 cwt. ($55-$83/mt or $50-$75/nt) higher.