(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor: Import market share was just about 24.7% in October 2019 which is the lowest level in at least 11 years (that’s as far back as we looked). In absolute volume terms, small diameter imports have not been this low since mid-2009 while total line pipe imports are just above an especially weak month in 2016. You again have to return to 2009 to see a lower level prior to that. This is primarily due to the decline in HRB prices combined with yearend inventory management (the 0-16” segment is mostly a distributor item) and the S232. On the demand side, the market is, of course, weaker in the 0 – 16” segment due to weaker upstream drilling activity. In the large OD category, Trump rhetoric, Executive Orders, the S232, and general uncertainty have pushed more of the large OD business to domestic producers. The high profile denial of the Plains exclusion request on 26” ERW pipe and the doubling of S232 tariffs on Turkey, which has since been reduced, provided additional incentive for pipeliners to push business to domestic producers. Based on the latest Simdex update, project announcements have been slower this year than last. In the twelve months ended October 2019, there have been 120 new North American projects announced for a total of 8,667 miles. In the 12 months ended October 2018, there were 182 projects announced for a total of 16,837 miles. Keep in mind that not all of these pipelines will get built but the pace of announcements generally trends along the same line as demand overall. Subscribe to the Simdex Future Pipeline Projects Worldwide Guide for more information. Subscribe at www.prestonpipe.com. Import Supply – The October import total was 64,263 tons which, while very low, is still below the license total published last month. November import licenses are up so expect 101,853 tons. The December forecast, with 12 of 21 days summed, moves up still further with early returns showing 111,864 tons. Given the time of year we doubt that volume. The big import item for the month of October 2019 is alloy,spiral weld over 16”,OD with 20,114 tons. The price is $1,480/ton. Obviously project pipe the YTD price in this category is $1,210/ton with volume at 210,441 so far this year. Interesting that the price for this category just last month was $183/ton higher so most likely a different project?
Preston Pipe Report – The Line Pipe Market Dec 2019
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