NEW YORK Tube and pipe
distributors are generally optimistic about near-term demand,
as some end markets have shown a recent pickup and others are
expected to rebound.
"Of all the products that we
handle, pipe and tube is probably the brighter spot," one
structural pipe and tube distributor source said. "I think that
peoples inventories are low and ... there (are) some
projects that are going on that have to do with a little bit of
A source at a Canadian producer
of hollow structural sections (HSS) and mechanical tubing
echoed that sentiment. "Demands good, and it was good in
December as well," he said.
A recently completed trade case
against imports of carbon-quality welded pipe from a number of
Asian, Eastern European and Middle Eastern countries
"hopefully" should help on the pricing front, he added. "But
there are always new importers. You shut the door for two or
three guys, and theres two or three more coming."
Sellers of oil country tubular
goods (OCTG) said that while demand is expected to improve as
drill rig counts rise again due to relatively high oil prices,
oversupply in the market could continue to crimp margins.
"Theres just so much
overcapacity, and were the dumping ground," one OCTG
distributor source said.
Sources said this month that a
trade case against South Korean producers of welded OCTG might
be imminent (
amm.com, Jan. 16).
For now, demand for OCTG remains
flat. "Its steady but feels slow," the distributor source
Demand for line pipe, on the
other hand, is expected to see a more immediate rise. "Line
pipe is very promising-looking in the near future," one trader
said. "Theres a huge number of pipeline projects on the
Distributor shipments of carbon
tube and pipe rose 2.1 percent to more than 2.78 million tons
in 2012 from 2.73 million tons the previous year, according to
the latest figures from the Metals Service Center Institute
(MSCI). Decembers shipments stood at 197,700 tons, down
4.4 percent from a year earlier.
The MSCI said distributors
inventories at the end of December were equivalent to 3.6
months supply, the highest level in two years.