(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor Projects: The section 232 ruling, the large OD trade case, and a variety of other White House initiatives resulted in a buying preference for domestic material over the course of 2018 and into 2019. Anecdotally this has been the case particularly in the project arena. Recently the trend has started showing up in the numbers. Import fulfillments of orders placed for projects continue but the share is clearly shifting to domestic mills. For 2018, import share of large diameter line pipe averaged 43% with a 4Q18 through Feb ‘19 reading of about 47%. In the last 3 months, using licenses for May, import share of large diameter line pipe dropped to an average of about 25% with each of the months lower than the month prior. Are import supplied projects over? No, in fact June licenses for large diameter line pipe through 11th are about 55,000 tons. Going forward, those will be the exception instead of the rule. Interestingly, but not surprisingly, in the small diameter sector, the opposite is true. Import share in 2019 has increased by about 10 percentage points. This is likely the result of buying patterns established when domestic hot rolled band prices were high. Since the last Report, it was announced that a positive final investment decision has been made for the Whistler Pipeline – a 475-mile, 2 bcf/d, 42 inch gas pipeline from Waha, Texas, to the Agua Dulce area in South Texas. The project is subject to approvals and is expected to be in service in 2H21. For all the latest information on pipeline projects worldwide, subscribe to the Simdex Future Pipeline Projects Worldwide Guide by visiting our website at www.prestonpipe.com. Import Supply: The April import total was 166,335 tons. May import licenses are 137,106 tons. The June forecast, with 8 of 20 days summed, is huge, given the last few months, at 233,981 tons. Keep in mind that project shipments can skew import numbers significantly in any one month. Licenses so far in June for the greater than 16” category are over 60% of the total – a much higher than usual ratio signaling project tons. The big import item for the month of April 2019 is carbon, ERW over 41/2”, not over 16” OD with 57,576 tons. The price is $906/ton up $5/ton from last month. Note that while market share of imports is down 6% the total volume is up just over 100,000 tons YTD.
Preston Pipe Report – The Line Pipe Market Jun 2019
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