US pipe prices were steady to higher this week on the heels of slowly increasing hot-rolled coil prices and higher scrap values which have now been rising since mid-December, as continued cold weather and snow reduces already low in-flows into Midwest scrap facilities, market insiders told SteelOrbis.
In flat steel markets, weekly HRC prices are discussed up on average $0.75/cwt. ($15/nt or nearly $17/mt), to $34.75-$35.25/cwt. ($695-705/nt or $766-777/mt), up from $34.00-34.50/cwt. ($680-690/nt or $750-761/mt) or $34.25/cwt., on a delivered to customer basis one week earlier.
February scrap prices in the US Midwest and Southeast are expected to increase $20-30/gt ($20-30/mt) from January values as cold weather and snow further reduces low reported inventories of scrap at Midwest collection facilities. Unconfirmed scrap industry reports continue to circulate in trading circles that scrap prices might rise as much as $50/gt for shredded scrap and prime grades.
“I’d be surprised to see scrap prices up $50/gt but I have heard those rumors too,” said one scrap insider.
US domestic J55 OCTG casing for carbon-grade material on an FOB mill basis is discussed at $1,400-1,500/nt ($70.00-75.00/cwt.), up from earlier assessments at an average $1,350/nt ($1,488/mt), or $67.50/cwt., market insiders told SteelOrbis.
“Pipe prices are up a bit with scrap and higher HRC values,” said one Gulf Coast pipe market insider. “While pricing is up a bit, the number of drilling rigs is nothing to write home about.” Pipe insiders keep track of the number of drilling rigs as a key indicator of likely pipe demand.
On the drilling side, weekly data from Houston, Texas-based Baker Hughes indicates the number of active US rotary drilling rigs declined by four to 576 rigs, 45 rigs less than at the same time one year ago. Natural gas rigs rose by one rig to 99 rigs, while oil rigs fell one to 477 rigs. Overall, the number of rigs is down 45 versus one year ago. Canadian rigs increased by 16 to 245 rigs, up 15 rigs from one year earlier.
“(ERW) pipe has moved up $10-20/nt,” said another Gulf Coast pipe insider. “HRC prices are on the rise, and we expect (flat steel) prices to continue to rise as more tariffs come into play.” US President Donald Trump has proposed new 25 percent tariffs on Mexico and Canada, while China could see an additional 10 percent tariffs added to their existing Section 232 tariffs.
Standard ERW pipe on an ex-mill US Midwest basis is discussed at $1,080-1,170/nt, ($1,190-1,290/mt, up from an average $1,070-1,150/nt ($1,179-1,268/mt) in earlier reported assessments.
In the hollow sections market, US Midwest ex-mill HSS is discussed flat at $1,150/nt ($1,268/mt), pipe insiders told SteelOrbis.
Overall, weekly pipe trade is expected to remain limited near term as many steel traders report waiting on additional spot purchases until February 1, when it is hoped the full extent of likely Trump tariff increases will be known.