US pipe market remains buoyant

With the domestic flat rolled market expected to register a $20 /nt increase in the late third quarter, domestic pipe mills are looking for a $20 /nt to $40 /nt increase, effective for August shipping. Market watchers expect this increase to be announced in the next couple weeks. The pricing trend for domestic pipes is now slightly up, due largely to the strength of the flat rolled market. Also, inventories are relatively low, and buying activity is still high. The residential construction market is still very active, requiring a great deal of water and gas pipes. For water and low pressure gas pipes, current domestic offers on the market for A53 standard pipe still range from about $47.00 cwt. to $48.00 cwt. ($1,036 /mt to $1,058 /mt or $940 /nt to $960 /nt). The energy sector is also still creating strong demand for value-added grades like API. The North American rig count as of the week ended July 28, 2006 totaled 2,261, up from 2,216 the previous week, and 1,933 for the same week the previous year. The offshore drilling bill that is being discussed in congress has found new support from President Bush, and this may stimulate the building of new offshore rigs and pipelines that will eventually increase the demand in this sector. The pricing trend for import pipe is now slightly down, as major import source China is has seen its flat rolled pricing go down $40 /mt to $80 /mt in the past two weeks. There are no indications that their pipe prices have gone down yet, but it is inevitable that they will come down soon. This week, Chinese offers for A53 standard pipe still range from $610 /nt to $650 /nt ($30.50 cwt. to $32.50 cwt. or $672 /mt to $717 /mt) FOB loaded-truck, Houston, Texas. Offers for sizes larger than 8” diameter from China are now going for approximately $700 /nt to $740 /nt ($35.00 cwt. to $37.00 cwt. or $772 /mt to $816 /mt) FOB loaded-truck at West and Gulf Coast discharge ports.