By the end of December, many traders anticipated a stronger January in terms of actual bookings from offshore sources to the US, on the heels of escalating foreign and US domestic coil and pipe prices. However, by month's end, the majority of traders' customers did not pull the trigger on significant offshore buys, as neutral demand and concern over future market prices remain the primary concern.
Although the majority of offshore standard pipe offers to the US increased an average of $4.00 to $5.00 cwt. ($88 to $110/mt or $80 to $100/nt) over the past month, US domestic prices increased approximately $7.50 to $9.50 cwt. ($165 to $209/mt or $150 to $190/nt) during the same time period. But rather than taking advantage of lower import offers, many buyers see escalating US domestic standard pipe and coil prices as a red flag not to commit to overseas lead times (now into April-May) due to the potential of domestic prices softening well before the product is delivered to US ports.
On the other hand, standard pipe demand is expected to slowly increase in the coming months, especially as the harsh winter conditions subside, and traders remain optimistic that even if import pipe prices increase further due to production costs and coil prices begin to neutralize or soften by the end of first quarter, which will eventually trickle into the pipe market by early first quarter, there is still a price buffer of about $5.00 cwt. ($110/mt or $100/nt) between import and US domestic prices that could lend import offers to be attractive to buyers.
Currently, the majority of electric resistance weld (ERW) black plain end (BPE) A53 Grade A standard pipe is being offered within the approximate range of $49.00 to $52.00 cwt. ($1,080 to $1,146/mt or $980 to $1,040/nt) duty-paid, FOB loaded truck in US Gulf Coast ports. Indian mills are offering at the lower end of this range, while offers from Dubai and South Africa are mostly found in the higher end of the range. The above general offered range is also likely to increase by about $2.00 cwt ($44/mt or $40/nt) over the next couple weeks in response to increasing foreign coil prices.