Pipe prices in the US continue to rise significantly along with the increased raw material costs, though they are not escalating nearly as fast as import prices.
On the ERW standard pipe side, domestic mills have now announced increases for the first quarter totaling over $200 /nt ($220 /mt or $10.00 cwt.) over Q4 pricing, due to the rising flat rolled prices. And with domestic flat rolled numbers still on the rise, more domestic pipe price increases are on the way.
Though ERW standard pipe demand is still being kept afloat due to the decent commercial construction demand, with residential construction continuing to stagnate and worsening economic news, pipe distributors say that overall, end-use demand is flat at best. Sales are still reportedly OK though, since customers are well aware of the upward pricing trend and want to buy ahead of further price increases. Domestic A53 prices will continue to rise at least into the second quarter, due not only to the flat rolled price hikes but also because of the lack of imports.
As in the markets for many other steel products, import pipe prices continue to be sold at a premium to domestic, keeping import arrivals to the US at a minimum. There are also not too many available offers right now, as foreign mills are able to get better returns in other markets. Domestic numbers in many cases trend $60 /nt to $80 /nt ($3.00 cwt. to $4.00 cwt. or $66 /mt to $88 /mt) lower than their import counterparts. Current US domestic prices for ERW A53 range from approximately $1,045 /nt to $1,085 /nt ($1,152 /mt to $1,196 /mt or $52.25 cwt. to $54.25 cwt.) ex-Midwest mills for April shipments.
With the former low priced leader, China, out of the market, current standard pipe offerings are mostly from India and Eastern Europe on the Gulf, and from South Korea and Taiwan on the West Coast. Some Turkish material is also arriving, but in very limited quantities.
Traders say that the latest Indian standard ERW pipe (A53, black plain end) prices for US customers are currently at a range of $55.00 cwt. to $56.00 cwt. ($1,213 /mt to $1,235 /mt or $1,100 /nt to $1,120 /nt) FOB loaded truck, US Gulf ports. There are also some scattered Eastern European offers. However, most Indian and Eastern European mills are reluctant to offer due to the rapidly rising flat rolled prices and, when they return to the market, their offers are expected to be approximately $100 /nt higher than the latest levels.
On the West Coast, East Asian offers of these pipes are significantly lower than the Gulf prices, though they are comparable to domestic prices on the West Coast. Previous booking levels in recent weeks were in a range of $960 /nt to $970 /nt ($1,058 /mt to $1,069 /mt or $48.00 cwt. to $48.50 cwt.) FOB loaded truck, though these numbers, both on the import and domestic side, continue to rise sharply.
For energy pipes like line pipe and OCTG, demand is stronger than that for standard pipe, with domestic producers also implementing major price increases in the first quarter. Supplies are tight since most import suppliers, especially on the OCTG side, are sending their tons to the hot markets in Europe and especially in the Middle East.
While China is absent in the welded standard pipe market due to the result of the antidumping and countervailing duty case, Chinese mills continue to export ERW line pipe to the US at bargain prices, squashing most other import competition other than South Korean prices, which are also much lower than the rest of the import competitors. Line pipe demand in the US remains strong enough to accommodate these lower priced imports though, and while they remain lower than the prices of other import sources, Chinese pipe prices are also on the rise due to the region's rising flat rolled prices. However, many US producers are still unhappy with these imports, and want to bring trade actions to keep them out.
There is currently talk of a potential antidumping petition from US Steel and Tenaris against line pipe from China and South Korea to be filed by the end of March. If the case is not filed by April 1, the US producers will have to recalculate their dumping margins and injury analysis. China and South Korea together accounted for 27 percent of total line pipe imports sent to the US in 2007.