(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor <= 16” Diameter – An increase in the rig count forecast will generate a change in the small diameter line pipe forecast. With an increase in the wells drilled forecast from 8,482 to 9,900 – on top of an ongoing reduction in DUC wells – our small diameter line pipe forecast is moving from 700,000 tons to 850,000 tons. From a supply perspective, we expect import welded to take the majority share of the gain in volume which will result in a higher import market share than in 2020. >16” Diameter – The reader will note that despite the increase in our small diameter forecast, our overall forecast is flat. Given the low level of activity in pipelines currently and generally sufficient takeaway capacity, we expect large diameter shipments to fall to 1.410 million tons from 1.488 million tons in 2020. 2021 will be the lowest level of large diameter pipe shipments since 2005. The pipeline sector is undergoing significant challenges. In addition to the FERC focus on assessing the impact of a pipeline on climate change and the continued legal challenges by the no-pipeline groups (in our newsletter on February 15th we noted that groups had filed suit to get FERC to revoke a permit for a 2.1 mile gas pipeline) emboldened by the Keystone XL cancellation, investors are wary. Import Supply – The December import total was 85,924 tons which was just over the license tally from last month. January import licenses show a big drop to 37,295 tons. The February forecast, with 11 of 19 days summed, is at 71,776 tons. The top import item for the month of December 2020 was Carbon ERW over 4 1/2” OD,not over 16” with 35,409 tons. The price was $594/ton, which is down $11/ton from last month and in our opinion, pretty amazing given the current state of HRB.
Preston Pipe Report – February 2021
Pipe Exchange
14025 West Road
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Houston, TX 77041
- Phone: 713.934.9480
- Fax: 713.934.9490
- Email: sales@pipexch.com