(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor <= 16” Diameter – It was noted in the OCTG section that it appears so far that July imports will reflect order patterns from after the collapse of drilling. There is typically a lag between weaker demand for OCTG and weaker demand for small diameter line pipe so this could be at work. There was also a heavy load of line pipe (welded, <= 16”) in June but what is interesting is that through July 14, about 60% of the licenses are for seamless product, <=16” diameter. Stay tuned. >16” Diameter – Despite the fact that the current administration is friendly to pipeline infrastructure, the challenges to pipeline construction are ongoing. Recently, the Dakota Access pipeline had been ordered to shut down pending a full environmental review. The Duke and Dominion Atlantic Coast Pipeline was cancelled earlier this month as delays and rising costs threatened the liability of the project. The Companies said that lawsuits, mainly from environmentalists aimed at blocking the project, had increased costs to as much as $8 billion from about $4.5 billion to $5 billion when it was first announced in 2014. Finally, the Supreme Court blocked a request filed by the Trump administration to allow construction of parts of the Keystone XL oil pipeline that had been blocked by a federal judge in Montana. Pipeline challenges and resulting delays are not new. According to a New York Times article, the amount of time to get federal approval to begin construction of an interstate natural gas pipeline has increased from 386 days in 2009 to 587 days in 2018. How will this look under an unfriendly administration? Import Supply – The May import total was 65,747 tons which is about 10% below the licenses from last month. June import licenses are up to 91,244 tons. The July forecast, with 10 of 23 days summed, is back down to 70,989 tons. The big import item for the month of May 2020 was Carbon ERW over 4 ½” not over 16” OD, with 14,114 tons. The price was $724/ton. This price is up $62/ton from the low priced level of the prior month recovering most of the $72/ton decline in April. As a result the YTD price is up $5/ton to $710.
Preston Pipe Report – The Line Pipe Market Jul 2020
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