Standard pipe buyers in the US market continue to only make purchases on an as-needed basis, choosing to work off existing inventory in anticipation of an imminent price correction.
With hot rolled coil (HRC) spot prices now having softened to a current range of approximately $43.00-$44.00 cwt. ($948-$970/mt or $860-$880/nt) ex-Midwest mill this week, industry insiders believe a decline in US domestic prices for standard pipe will soon follow. As a result, service centers are attempting to stretch their existing inventories and are only buying if there are inventory holes to be filled.
Nonetheless, US domestic pipe mills are not making deals just yet below electric resistance weld (ERW) black plain end (BPE) A53 Grade A spot prices of $56.00-$58.00 cwt. ($1,235-$1,279/mt $1,120-$1,160/nt) ex- Midwest mill, and spot ranges are predicted to remain intact through April. By May however, HRC spot prices are expected to have eroded further, taking standard pipe prices-which are already too high under current demand levels-with them.
A slowdown in activity has been observed on the import side as well. US buyers of imported standard pipe anticipate that import offers will begin to fall in May following US domestic spot prices, making an order placed at existing import prices less valuable by the time it arrives in July and August. However, even if US buyers did decide to place an import order today, there aren't many available. Sources have informed SteelOrbis that offshore mills are aware that the US market is on the verge of softening, and are wary of getting caught with cancelled orders, as they sometimes have in previous years when US prices spiked and then sank sharply.
In any case, Taiwanese and Korean mills are still offering standard pipe to the US, with the most competitive offers coming from Taiwanese mills. ERW BPE A53 Grade A offer prices from Taiwan to the US have fallen approximately $1.50 cwt ($33/mt or $30/nt) since late March, and now range from $48.50-$49.50 cwt. ($1,069-$1,091/mt or $970-$990/nt) duty-paid FOB loaded truck in US Gulf ports.
Korean ERW BPE A53 Grade A offers on the other hand, have increased $0.50 cwt. ($11/mt or $10/nt) since our last report two weeks ago and currently range from $50.50-$51.50 cwt. ($1,113-$1,135/mt or $1,010-$1,030/nt) duty-paid FOB loaded truck in US Gulf ports. Industry sources noted that the most recent Korean standard pipe offers came in at approximately $52.00 cwt. ($1,146/mt or $1,040/nt) duty-paid FOB loaded truck in US Gulf ports, but due to falling Taiwanese prices, US buyers have able to negotiate Korean prices down by about $1.00 cwt. ($22/mt or $20/nt).