(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor: 16” and Under Diameters – There were two duty rate adjustments since the last Report in the line pipe sector – both were preliminary. First was the result of the Antidumping Administrative Review of welded line pipe from Korea which included the following specific preliminary rates: Hyundai Steel, 19.42%; SeAH Steel, 2.3%; All Others, 10.86%. If finalized, these rates will replace the following: Hyundai, 6.23%; SeAH, 2.53%; and All Others, 4.38%. Next, was the result of an Administrative Review in the CVD case against Turkey. This preliminary result has the Borusan group of companies’ rate falling to 0.78% from 152.2%.
(American Iron and Steel Institute, www.steel.org – January 10, 2018) Based on the Commerce Department’s most recent Steel Import Monitoring and Analysis (SIMA) data, the American Iron and Steel Institute (AISI) reported today that steel import permit applications for the month of December totaled 2,473,000 net tons (NT)*. This was a 13.6% decrease from the 2,861,000 permit tons recorded in November and a 10.5% decrease from the November final imports total of 2,762,000 NT. Import permit tonnage for finished steel in December was 1,854,000, down 14.6% from the final imports total of 2,170,000 in November. For the full year 2017 (including December SIMA permits and November final data), total and finished steel imports were 38,149,000 NT and 29,534,000 NT, up 15.5% and 12.1%, respectively, from 2016. The estimated finished steel import market share in December was 22% and is estimated at 27% for 2017. Finished steel imports with large increases in December permits compared to the November final included tool steel (up 52%), heavy structural shapes (up 42%), tin free steel (up 30%) and mechanical tubing (up 11%). Products with significant 2017 increases include oil country goods (up 197%), line pipe (up 62%), standard pipe (up 39%), mechanical tubing (up 30%), hot rolled bars (up 23%), structural pipe and tubing (up 19%), cold rolled sheets (up 15%), sheets and strip all other metallic coatings (up 13%) and sheets and strip hot dipped galvanized (up 11%). In December, the largest finished steel import permit applications for offshore countries were for South Korea (179,000 NT, down 16% from November final), Brazil (99,000 NT, up 1%, Japan (86,000 NT, down 25%), Germany (84,000 NT, down 41%) and The Netherlands (61,000 NT, down 45%). In 2017, the largest offshore suppliers were South Korea (3,740,000 NT, down 1.9% from 2016), Turkey (2,186,000 NT, down 9% from 2016) and Japan (1,509,000 NT, down 16% from 2016).
(by Kurt Minnich, www.pipe-logix.com) Line pipe prices jumped 3.6% in January with domestic prices increasing 3% and import prices up 4.5%. All of the items tracked by Pipe Logix are priced higher in January; extraordinarily, 2” domestic seamless prices jumped 13% for the month. Distributor’s sentiment also increased strongly in January with the NASPD Index at 68, indicating an expanding market. The NASPD Index has scored over 50 for 11 of the past 12 months, though the January reading is slightly lower than the reading a year ago. Nearly all the distributors expect prices to increase over the next couple of months. Only 25% of the distributors felt that way in November. Import volumes over the past 12 months have totaled 2.2 million tons, a 67% gain compared to the volumes during the previous period. Shipments per active rig were lower in November and December with the December ratio on par with the lows in 2015 and 2016.
(by Mike Mechley, Executive VP of Strategic Procurement, www.ZekelmanIndustries.com) Platts Jan HR Coil is $663, up $23 from Dec. Nucor raised prices an additional $40 last week all mills have followed this increase. HR and CR announced increases in the last three months are up a minimum of $140 a ton. HRC imports are lower every month. Section 232 recommendation will be issued next week, final decision due within 90 days of report. HR lead time 4-7 weeks,CR lead time 5-8 weeks. US Mills capacity utilization rate is 70.7%. Platts Jan CR Coil is $844, up $20 from Dec. Zinc is $1.53lb. Inventory 10y low, price 10y high. Jan Chicago #1 Bush $365 up $20 from Dec. $1 U.S. Dollar = $1.25 Canadian Dollar.
(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor: 16” and Under Diameters – The small diameter line pipe market has been largely served by imports for several years. 2017 is no exception. Year to date import share is about 67%. Small diameter shipments have improved in the second half of the year with the benefit accruing disproportionately to imports. Import shipments have grown by 55% 2Hv1H while domestic shipments have only improved by about 20%. Greater than 16” Outside Diameter – In the latest Simdex update, 35 new projects were announced in the October/November time frame in the U.S. and Canada for a total of 1,978 miles. Of those projects, Read more
(by Kurt Minnich, www.pipe-logix.com) Line pipe prices are slightly higher in December. There is no net change in domestic prices but a 0.5% increase to import prices. Domestic prices have been mostly steady since August while import prices have trended higher, up 4% since August. Distributor’s sentiment became more positive this month with the NASPD Index at 58, suggesting a modestly expanding market. Most distributors expect prices to increase in the near-term with little change to inventory. Reported import volumes were over 250,000 tons in October but the final trade numbers are expected to be significantly lower in November. The Baker Hughes rig count is averaging 930 active rigs this month, a 2% gain from the previous month and ending a four-month trend of lower rig counts.
(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor: In total, line pipe shipments in 2017 are expected to exceed the 2016 level by just under a million tons with 80% of the growth in the 0-16″ segment. In the standard pipe section, we discuss the price relationship that resulted in imports destined for standard pipe applications brought in as line pipe in 2016.
(by Mike Mechley, Executive VP of Strategic Procurement, www.ZekelmanIndustries.com) Platts Dec HR Coil is $640, up $25 from Nov. Nucor raised prices an additional $30 last week all mills have followed this increase. HR and CR announced increases in the last two months are up a minimum of $100 a ton. Imports shipments continue to be weak. World prices remain very strong. Scrap forecasted to be up $20 in January. HR lead time 4-7 weeks, CR lead time 5-8 weeks. US Mills capacity utilization rate is 71%. Platts Dec CR Coil is $824, up $20 from Nov. Zinc is currently $1.43lb. Inventories remain low. Dec Chicago #1 Bush $345 up $20 from Nov. $1 U.S. Dollar = $1.29 Canadian Dollar.