(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor: In total, line pipe shipments in 2017 are expected to exceed the 2016 level by just under a million tons with 80% of the growth in the 0-16″ segment. In the standard pipe section, we discuss the price relationship that resulted in imports destined for standard pipe applications brought in as line pipe in 2016.
The balance of the growth was related to stronger upstream activity and inventory build. 16″ and Under Diameters: Slightly higher drilling overall in 2018 should keep gathering related line pipe demand relatively flat to slightly up when compared to 2017. We expect 2017 0-16″ shipments to end up at about 1.7 million tons which includes some inventory build. In 2018, we are forecasting small diameter shipments of 1.6 million tons. This still represents some inventory build we believe but shipments will be more in line with consumption. Absent any 232 action, we expect the source of supply mix to remain relatively unchanged. Greater than 16″ Outside Diameter: Large OD shipments in 2017 are expected to end up at about 2.2 million tons. Modest growth in project business will push this number up by about 200k tons in 2018 to 2.4 million tons. As we noted last month, projects have shifted towards natural gas. While protests over pipeline projects are continuing to increase in frequency, the regulatory process is becoming just a bit easier. While the Trump administration has struggled to complete the big ticket items they campaigned on, regulation reform has been one quiet area that has moved forward.