(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor <= 16” Diameter – At the Summit, we had a presenter that gets a first-hand look at pipeline business both in terms of gathering systems and midstream activity. The message, as readers would expect based on upstream E&P activity and by looking at small diameter line pipe shipments, is that most everything is on hold. As in OCTG imports, the last time small diameter line pipe shipments were this low was in August/September 2009. The outlook provided by our presenter for the next 3 years will be a driver of the 2021 forecast we publish next month. >16” Diameter – While our gathering expert from JTAM Engineering also touched on midstream activity, this year’s Summit also included separate midstream presenters from East Daley Capital that provided a very concise, basin-by-basin view of pipeline capacity and production of oil and natural gas. This allowed them to prognosticate on when additional pipeline construction would be required to meet demand. Building pipelines is a lot like building manufacturing capacity – it provides a stairstep profile that reflects additional capacity in tranches. By the nature of the process, pipeline construction follows pipeline demand, like it did in the Permian Basin, and is almost always overbuilt. Combine that with production declines related to Covid and it provides a sense of where we are in the process. Our analysis will be reflected in the November forecast issue in large diameter line pipe. Import Supply – The August import total was 48,859 tons which is about 25,000 tons below the license tally from last month. September import licenses are down just a bit more to 42,853 tons. The October forecast, with 7 of 21 days summed, is up to 43,164 tons. This is a very early forecast as October license reporting is behind. The big import item for the month of August 2020 was Carbon SAW over 16” OD, with 12,795 tons. The price was $1,120/ton. Since this is normally project specific, price comparisons are not always on track but this is well within the range of this category YTD.
Preston Pipe Report – The Line Pipe Market – October 2020
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