(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor Projects: Last month we highlighted the pipelines that were pending in the Permian Basin most of which were under construction. If you add the capacity of each of the pipelines, the total points to an overcapacity that will be worked off over the next 4 years or so, assuming production forecasts for the region play out as expected.
As we think about the implications of putting this much pipeline capacity in service, it leads us to expect to see a flurry of construction of smaller lines to feed these pipelines over that same next 2 to 3 years. The size range of these lines will be in the 8 – 16 inch diameter grouping. We noted at last year’s OCTG and Line Pipe Forecasting Conference that the number of smaller OD, shorter pipeline projects had grown as a percent of the total. According to the latest update from Simdex, pipeline project announcements in the US have slowed in the last month with just 6 new projects announced for a total of 144 miles. The largest is a 100 mile project consisting of 12 inch diameter pipe. In our forecast we had expected the market to remain strong in 2019 as projects are completed but forecast a downturn as the cycle flows after this year. Much will depend on activity in basins outside the Permian. 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. AD duty rates have had minor revisions in the case of Large Diameter Line Pipe due to a ministerial errors for a number of producers. Please see the Trade Case Scoreboard for details. Import Supply – The March import totals were 201,690 tons, nearly 50,000 tons above the license total from last month. The April import licenses were 85,871 tons. The May forecast, with 10 of 22 days summed, is 179,629 tons. It certainly appears the pace of imports is showing signs of slowing. The big import item for the month of March 2019 is carbon, ERW over 41/2”, not over 16” OD with 48,476 tons. The price is $901/ton.