(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor – Small Diameter – Despite the shift toward horizontal drilling, which for each well effectively eliminated some of the line pipe and replaced it with OCTG, and the increase in the production of oil and natural gas per ton of OCTG, small diameter line pipe tons remained remarkably consistent with OCTG tons through early 2021. Since then, the paths are off. In Texas, where much of today’s drilling is occurring, <=16” pipeline work was less than half the level in 2021 as it was in 2020 despite their being more well completions in 2021. Large Diameter – Over the course of much of 2021 the historical relationship of plate prices vs HRB prices was inverted and HRB prices were higher. This had the effect of improving the economics of LSAW-produced large diameter pipe when compared to HSAW pipe. When HRB prices began to fall late last year, plate prices proved more resilient to the point where now they are about double the price of HRB which is an historic record for the two steels. This has made HSAW large diameter pipe more cost effective than LSAW product. What is unusual about the plate price level is that it doesn’t appear to be the product of elevated mill lead times which is a traditional indicator of price. That said, Nucor Brandenburg is expected to start up in late 2022 with a ramped up capacity of 1 million tons/year.
Preston Pipe Report – August 2022
Pipe Exchange
14025 West Road
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