The National Association of Steel Pipe Distributors held it’s annual conference this week in Palm Springs, California, and attendees from all across the country made their way to California to how infrastructure spending, cancelled pipeline projects, and oil well drilling will impact market demand in 2024.
In terms of infrastructure projects, this conference panel comes on the heels of an announcement that the Biden administration has allocated nearly $6 billion to promote clean drinking water / wastewater infrastructure projects.
“We have started to see some of the infrastructure spending coming through [to our industry], depending on the state,” said Jim O’Shea, regional sales manager at Zekelman Industries, adding that he’s seen a strong push for tubing from the solar industry.
Speaking to the impact of cancelled pipeline projects was Berg Pipe VP of Sales Jonathan Kirkland, who said that the cancellation of US pipeline projects, including the Keystone Pipeline Project, was devastating for the industry.
“It’s not just devastating for the mills, it’ devastating for the whole industry because a pipeline cancellation has major impacts,” he said. “Most of that steel has gone back into the market [as surplus steel]. The infrastructure bill has helped some of that steel find homes, but for the past 2 years, we as an industry, along with every pipe mill in the nation, has essentially been competing against their own pipe for every project they bid.”
In terms of other positives for the pipe market, Axis Pipe and Tube, LLC
CEO Rusty Fisher pointed out that number of drilled, uncompleted oil wells in the US is much lower today than it was at the start of 2023.
“In 2023 there was record oil production in the US, but the US did not have record drilling,” he said. “The answer to how that happened is that these drilled, uncompleted wells were being completed faster than they were drilling new wells. I also see a lot of other things, like the inflation reduction act, which are going to stimulate the market.”