The weak demand in the US pipe market, in combination with the excess inventory in the market and the expectation of further decreases in domestic prices, provide US traders very little opportunity to pursue import pipe bookings.
The outlook for the US pipe market, the standard pipe market in particular, was not looking terribly bad as recently as a couple months ago, when hot rolled coil prices were still on the rise. Even though standard pipe demand had not shown any signs of great promise and ports remained overloaded with excess foreign product, many traders were still hoping that domestic prices, buoyed by HRC, and demand would stay firm enough for buyers to eventually start purchasing some offshore pipe for late-first quarter delivery.
However, the recent softness in US scrap and hot rolled coil prices and the further weakening of domestic pipe activity has darkened the outlook for import pipe for at least the next couple months. With domestic prices now trending downward again, the risk-versus-reward ratio for US buyers to book offshore pipe is weighed too heavily on the risk side.
Nevertheless, there are still a couple offshore standard pipe offers that have managed to keep traders' interest. Korean ERW (electric resistant weld) BPE (black plain end) Grade A standard pipe offers made some noise at the beginning of the month with a couple significant price decreases. While prices have remained fairly neutral since then, offers are still attractive when compared to domestic offers, with most Korean ERW BPE standard pipe offers currently ranging from approximately $33.00 cwt. to $35.00 cwt. ($728 /mt to $772 /mt or $660 /nt to $700 /nt) duty-paid, FOB loaded truck in US Gulf ports. (Only larger companies looking for substantial tonnage will be able to book at the lower end of the range.)
Meanwhile, some import offers for ERW ASTM A53 galvanized plain end (GPE) standard pipe also continue to float around. Offers from India are still a little on the high end, at about $41.00 cwt. to $42.00 cwt. ($904 /mt to $926 mt or $820 /nt to $840 /nt) duty-paid, FOB loaded truck in US Gulf ports. These offers are not particularly competitive, mostly due to strengthening of the Indian domestic market and their resulting lack of interest in chasing US orders. Mexican GPE offers can also be found within that general range of $41.00 cwt. to $42.00 cwt. delivered to Houston; however, if given a choice, most buyers will prefer Indian GPE since Indian producers are the more traditional import source for this product and buyers have become accustomed to their quality and shipment standards.
Preliminary census data from the US Steel Import Monitoring and Analysis System (SIMA) demonstrate that total import tonnage of standard carbon steel pipe slightly increased from 34,619 mt (final census data) in August to 35,165 mt in September. The top three exporters of standard carbon pipe to the US were Canada, at 13,710 mt; India, at 5,339 mt; and Mexico, at 4,881 mt.