(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor – While there are currently not a lot of large diameter projects in the hopper, LSAW producers have the rare advantage in raw material pricing. While we won’t comment on plate and coil for line pipe grades specifically, standard plate and base hot rolled band pricing is upside down from its usual position. In the latest SteelBenchmarker, base HRB prices are listed as $1,320/ton versus standard plate pricing at $1,138/tons. Before the pandemic, the differential was basically reversed. In past issues we have raised the possibility that FERC, under democratic leadership, could change its position on assessing the climate impact of proposed natural gas pipelines. The policy of the commission for the last 20 years was to evaluate just emissions from the project itself and not emissions from using the products shipped. In the case last month of a Northern Natural Gas Co. pipeline replacement project, the commission departed from its long-running policy and, for the first time ever, considered emissions from the project AND from use of the natural gas being shipped. The pipeline was ultimately approved primarily because it was a replacement project and there would be no new emissions from use. There were several areas of concern in this case for two of the five commissioners: First, enacting a drastic policy change in an individual case, one commissioner said, was unfair to natural gas companies that may have weighed in if they had known what FERC was considering. Groups that don’t intervene in a FERC docket ahead of time lose legal standing to challenge eventual orders. Second, as another commissioner said of the case, “the commission said it did a GHG analysis, but it’s not particularly clear what that means. They didn’t articulate what this standard is.” Without a standard in place, FERC reviews become a political exercise. Import Supply – The February import total was 50,844 tons which was just above the license tally from last month. March import licenses show an increase to 68,941 tons. The April forecast, with 10 of 22 days summed, is at 18,298 tons. This would be an unusally low import volume but to some extent could express the ‘pause’ that is present in this market today. The top import item for the month of February 2021 was Carbon SAW over 16” OD, not over 24” OD with 16,617 tons. The price was $999/ton. This was the first big import surge of this product this year. Note it is SAW and not ERW.
Preston Pipe Report – April 2021
14025 West Road
Houston, TX 77041