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 building."
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 said.
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 drawing board."
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.