(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor <= 16” Diameter – In the OCTG section we noted that domestic HRB prices were increasing more than world export prices and that as a result, imports had increased more than domestic shipments. In small diameter line pipe, import market share averaged 53.7% during the last 4 months of 2020. Import share so far in 2021, with one month of actual data and one month of licenses, suggests that import share has increased to 66.4%. Line pipe imports are on track to be higher in March, based on licenses through the 16th, so we expect the increasing import share trend to continue. >16” Diameter – In recent shareholder presentations, both Enterprise Products Partners and Kinder Morgan laid out plans to reduce capital expenditures by buying other pipeline systems and repurposing existing pipelines. This strategy was based on the uncertainty in the future of the markets and expected additional challenges of pipeline construction under the Biden administration. It is unclear how many pipeline companies focus on repurposing existing assets but it is the next logical area of concentration. The International Trade Administration, in the first sunset review of the CVD case regarding welded line pipe through 24” from Turkey, determined that a revocation of the order would likely lead to a recurrence of subsidies. Therefor, the order is maintained. See the Trade Case Scoreboard for individual company rates. We’ve written about the challenges of to producers of pipe now in someone’s inventory that was manufactured for cancelled projects. Recent projects include the Keystone XL, Atlantic Coast, and the Constitution pipeline. Recently, an ad was published by an auctioneer in the North American Oil and Gas Pipeline Magazine, offering 500,000 feet of 30” 0.529” and 0.562” API X70 DRL FBE line pipe for sale. Import Supply – The January import total was 36,854 tons which was just about right on the license tally from last month. February import licenses show an increase to 48,021 tons. The March forecast, with 12 of 23 days summed, is at 50,322 tons. The top import item for the month of January 2021 was Carbon ERW over 4 1/2” OD, not over 16” OD with 12,562 tons. The price was $587/ton, which is down $7/ton from last month and $18/ton over the last 2 months.
Preston Pipe Report – March 2021
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