Panic sinks pipe and tube prices despite drive to ‘hold the line’

Dec 07, 2008 | 07:00 PM |

That extended bull market cycle everyone was talking about a few months ago—well, that sounds like a bunch of bull these days.

Prices for most pipe and tube items are dropping—by as little as two percent to nearly 19 percent, according to market sources and a Perspectives survey. Several also noted a widening spread between domestic and import prices (which is why Perspectives included a few more imports prices in this issue).

The vast majority of survey respondents said they expected pipe and tube prices to continue to trend downward in coming months. Some said they expect tags to move sharply downward, although a small minority said they expected prices to hold steady. None said they anticipated increases.

Most also felt that market conditions were poor or very poor, although a few lucky souls felt their markets were in fair or good shape.

"The economy is tanking, and prices are starting to drop as the market has seized up," one respondent said.

Another respondent said there is currently "no market" and that prices were slipping on poor demand and lower hot-rolled-coil tags. He said he expected those conditions to continue through December and January but hoped that the end of the first quarter could see more activity if the economy were to pick up.

While some expressed cautious optimism, Perspectives was struck by just how negative most market sentiment was.

Several people Perspectives spoke with said some major pipe mills don't have any orders booked past March 31. Almost all noted a slowdown in activity—be it on the construction or the energy front, which has been hit hard by tumbling oil and gas prices. Several also noted that some mills have been dropping prices, even if letters officially announcing the decreases may not have gone out.....