CHICAGO Steel pipe and
tube market activity has slowed as the traditional year-end
doldrums have kicked in, leaving market players scratching
their heads about what 2013 might bring.
Opinion is divided, with
respondents to a recent AMM survey describing the
state of the market as "poor," "fair" or "good" in roughly
equal measures. Still, some two-thirds of respondents said that
they expect prices to remain where they are next year, with the
balance expecting slight increases.
One pipe mill respondent said
that most of the sheet price increases announced over the last
two months have been holding, bolstering tags despite
But another pipe mill source
said that his company had been able to secure some of the
cheapest prices for coilthe substrate for pipe and
tubethat it had seen in about five years. "Price increase
are negotiable," the source said. "Theyre not really
holding, and deals are being made."
With coil costs rising for most
pipe mills, most market sources reported slightly higher prices
for tubular products such as hollow structural sections (HSS)
this month. AMMs December price for HSS rose to
$940 per ton ($47 per hundredweight), up 1.6 percent from $925
per ton ($46.25 per cwt) in November but off 2.1 percent from
$960 per ton ($48 per cwt) in December 2011.
For most pipe and tube products,
market sources reported flat to slightly higher prices in
December over November, although sources quoted a wide range of
prices. Despite the overall consensus that prices were steady
or strengthening, a handful of players nonetheless insisted
that tags were falling, especially for products such as
imported line pipe.
The lack of clarity in pricing
trends comes at a time when most sources report that activity
has tapered off across the board as the winter holidays
approach. According to sources, many customers are putting off
purchases until next year or looking to liquidate inventory
ahead of year-end taxes in some regions.
"People are just sitting on
their hands waiting for some demand," one service center source
said. "Ag(riculture) and automotive are OK. Construction is
slightly better, but still terrible."
He said what worried him most
going into 2013 was not demand from those markets so much as
factors beyond his companys control, such as economic
troubles in Europe and China and the potential impact of new
tax policies in the United States.
A pipe and tube distributor said
that his firm had experienced a better December this year than
last, but he chalked that up mostly to luck. He added that he
was concerned about uncertainty in 2013. "Every year, we poll
our customers to see what they think the next year will look
like," he said. "For the first time I can remember, no one
really seems to have a clear idea. I dont think its
going to be a great year, but I dont think were
going to fall off a cliff either. Well see."
Some sources in the energy
tubulars sector were more pessimistic, noting that increased
global tubular capacity has made it increasingly difficult to
maintain healthy margins.
On the trade front, questions
remain about whether domestic mills might bring a trade
petition against overseas energy tubular producers in early
One trader said that some domestic mills had become very
aggressive in looking to match even low-priced imported
product, leaving little incentive for customers to buy overseas
material. "Nobody is really buying," he said. "Everything is
just at a standstill."