(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor Projects: So far this year, the gain in shipments over last year is virtually all attributable to large diameter – pipe in excess of 16” diameter. Annualizing the shipment levels through August – which includes licenses for August – indicates 4.8 million tons of line pipe which represents an increase of over half a million tons from last year’s level. Interestingly, while domestic producers have gained significant share in the large diameter segment, the reverse has occurred in small diameter products. In large OD, domestic producers have a 65% share which is up from a 56% share in 2018. In the small diameter sector, domestic share this year has fallen to 32% from about 41% last year. This is not really an apples to apples comparison. In the large diameter sector, project orders are of significant quantity which may take a year to run while small diameter orders, on average, are more directed to inventory. This would result in the steel section 232 having a greater impact on large diameter than on small. Last month we noted that despite declining OCTG demand we didn’t expect much of an offcycle in pipeline construction related to weaker drilling. This is at least partially due to the situation with DUC inventory liquidation as seen in the OCTG section of this Report. Projecting out 2019 completions, for the full year it is expected that there will be about 1,700 more completions this year than last. Line pipe consumption is related to production growth and not necessarily the drilling of wells – unless they are completed immediately. We expect DUC liquidations to continue which should continue to feed the pipeline system. For more information on this and other pipeline projects, subscribe to the Simdex Future Pipeline Projects Worldwide Guide. Import Supply – The July import total was 161,257 tons. August import licenses are 185,360 tons. The September forecast, with 11 of 20 days summed, continues downward to 127,684 tons. The big import item for the month of July 2019 is carbon, ERW over 4 1/2”, not over 16” OD with 42,868 tons. The price is $853/ton. The YTD for this category, 365,681 tons.
Preston Pipe Report – The Line Pipe Market Aug 2019
Pipe Exchange
14025 West Road
Suite 100
Houston, TX 77041
- Phone: 713.934.9480
- Fax: 713.934.9490
- Email: sales@pipexch.com