US pipe market – Chinese flat rolled market boosts import prices

Low-tier import pipe prices in the US have rebounded due to price increases in the Chinese flat rolled market. Standard pipe prices have gone up approximately $20 /nt ($1.00 cwt. or $22 /mt) in the past two weeks, with Chinese A53 standard pipe offers now ranging from $600 /nt to $640 /nt ($30.00 cwt. to $32.00 cwt. or $661 /mt to $705 /mt) FOB loaded-truck, Houston, Texas and sizes over 8” ranging from $700 /nt to $740 /nt ($35.00 cwt. to $37.00 cwt. or $772 /mt to $816 /mt) FOB loaded-truck. This price range is also valid for most West Coast ports. Chinese line pipe (API 5L X42) offers now range from approximately $690 /nt to $740 /nt ($34.50 cwt. to $37.00 cwt. or $750 /mt to $816 /mt) FOB loaded-truck in Houston, with similar extras for pipe larger than 8”. The pricing trend for import standard electric resistance welded (ERW) pipe is stable for now, due to the strength of the Chinese flat rolled market. However, due to the sheer number of Chinese pipe mills exporting to the US, Chinese prices still remain significantly lower compared to US prices, and Chinese mills are still hungry for US bookings. Chinese mills primarily use the narrow band made from billets to make pipes, which is cheaper and could be of lower quality, with doubts surrounding welding and steel consistency. Other mills in Asia are reportedly also considering using the cheaper strip method. Energy pipes such as OCTG and seamless line pipe from both import and domestic sources are still in high demand due to drilling applications and the replacement of old transmission lines. However, as ERW pipe prices rise, and because of the recent slight softening of seamless prices, the pricing gap between the imported ERW and seamless pipe is getting narrower. The Baker Hughes North American Rotary Rig Count shows that as of January 26, the rig count was 2,363, slightly higher than the previous week's count of 2,351, and 178 rigs higher than the count for the same week of last year. In the US, pipe supplies are still high, but demand is strong enough to keep the pricing trend flat. Prices have remained stable in recent weeks, and no major changes are expected until the expected pickup in pipe demand and flat rolled pricing occurs in March. ERW pipe consumption remains pretty strong due to the strong commercial construction market. Construction activity and standard pipe demand should continue improving into the spring and summer. Also, Nucor's recent announcement of a $20 /nt increase for hot rolled offers shipped in March indicates an improvement in the domestic flat rolled market that will eventually be passed along to the pipe market, pushing prices up. This week, most domestic offers for A53 range from $46.00 cwt. to $47.00 cwt. ($1,013 /mt to $1,036 /mt or $920 /nt to $940 /nt) ex-mill, while domestic line pipe offers range from $54.00 cwt. to $55.00 cwt. ($1,191 /mt to $1,213 /mt or $1,080 /nt to $1,100 /nt) ex-mill. Sources say that the Mexican standard ERW pipe market has improved slightly as the flat rolled pricing trend appears to be heading up again.