The US import pipe market hasn't been generating too much significant activity recently, although traders indicate that while activity is "unexciting", it hasn't dipped and there could be a slight increase in the not-too-distant future.
Nevertheless, as long as US domestic hot rolled coil (HRC) prices continue softening, the chance for traders to experience any real uptick in pipe imports to the US will be limited. Current US domestic HRC spot prices may be booked as low as a little under $26.00 cwt. ($573/mt or $520/nt) ex-mill. But as poor as the HRC market has been, prices should stabilize by the end of this month, with an opportunity to pick up in December. This wouldn't take long to have an effect on the pipe market.
Once domestic pipe prices demonstrate some sort of uptick, buyers will begin looking more toward offshore sources. Many offers from offshore have been aggressive, and if they can continue to stay aggressive throughout the end of the year, buyers may react for end of first quarter delivery.
Speaking of aggressive, Korean offers for API J55 electric resistance welded (ERW) oil country tubular goods (OCTG) casing are ranging from approximately $44.00 to $46.00 cwt. ($970 to $1,014/mt or $880 to $920/nt) duty-paid, FOB loaded truck in US Gulf ports. However, speculation is that Korean mills have already been too aggressive with these offers as many traders expect antidumping measures to be filed against them in the near future.
This would inherently open the door for other offshore sources such as Malaysia and Taiwan offering OCTG to the US, especially as US rig counts remain stable despite an unstable economy. According to the latest Baker Hughes North America Rotary Rig Count report, the total number of active running US rigs increased by three, to 1,672 for the week ending October 29. Although last week registered a slight increase and is only up one over the past four weeks, last week's count represents the highest number of active rigs in the US since the last week of 2008.
On the structural side, current offers on electric resistance welded (ERW) black plain end (BPE) A53 Grade A standard pipe have remained neutral, on average, from our last report two weeks ago, with offers out of Dubai and Malaysia respectively ranging from approximately $42.00 to $43.00 cwt. ($926 to $948/mt or $840 to $860/nt) and $41.00 to $42.00 cwt. ($904 to $926/mt or $820 to $860/nt) duty-paid, FOB loaded truck in US West Coast ports. Some traders have concluded deals slightly below this range.
On coated products, Indian mills continue to be less flexible on offers on ERW galvanized plain end (GPE) A53 Grade A as they continue to range around $48.50 cwt. to $49.50 cwt. ($1,069/mt to $1,091/mt or $970/nt to $990/nt) duty-paid, FOB loaded truck in US Gulf ports.