(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor – Small Diameter – Small diameter line pipe shipments over the last three months have increased to 110k tons (using import licenses for November), on average, from about 94k tons per month in the prior 5 months. Virtually all of the gain came from the import sector. Large Diameter – Large diameter shipments have turned the corner and are on the rise. It is too early to tell if this is the beginning of a full cycle or just a mini-cycle large pipeline project announcements and positive FIDs are still sparse. According to the latest World Energy Outlook from the International Energy Agency, the energy supply mix could be moving away from natural gas faster than it would have if the Russia/Ukraine war had not occurred. The IEA says in their report, “The depth and intensity of today’s crisis have led to concerns about the future cost and availability of natural gas which have damaged confidence in its reliability and put a major dent in the idea of it serving as a transition fuel. As a result, the era of rapid global growth in natural gas demand is drawing to a close”. In the IEA’s best case (for gas demand) scenario, gas demand growth rises by less than 5% between 2021 and 2030, compared with a 20% rise between 2011 and 2020. It then remains flat from 2030 at around 4,400 bcm through 2050, with growth in emerging market and developing economies offset by declines in advanced economies. In other words, the use of coal and oil are likely to temporarily increase while the shift to renewables and electrification accelerates. This is important because were this to occur, it could threaten much of the US LNG capacity that is approved but not yet built. We are tracking close to a million tons of pipelines associated with these facilities (including the Nikiski, Alaska facility). As an aside, in the list of Wood Mackenzie predictions for 2023, one is that LNG contract commitments would slow from the 2022 pace. Import Supply – The October import total was 126,678 tons which was about 20,000 tons above the license tally from last month. November import licenses are down at 108,264 tons. The December linear forecast, with 8 of 21 days summed, is in line at 112,116 tons. The top import item for the month of October 2022 was carbon ERW, over 4 ½” OD not over 16” OD, at 49,804 tons. The price was $1,403/ton which is down $81/ton offsetting almost exactly last month’s increase. Price is steady.
Preston Pipe Report – November 2022
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