NEW YORK Pipe and tube
distributors say they would welcome a move by flat-rolled
steelmakers to take capacity offline in order to prop up
pricing for the substrate.
"Everybodys hoping that
some of the flat-rolled mills will take out some capacity," one
Midwest distributor source said.
Flat-rolled steel distributors
have been lamenting excess production capacitys effect on
amm.com, May 15).
A second Midwest distributor
source said it was likely that flat-rolled mills would
eventually take some production offline. "We might see some
extended maintenance outages during the summer if (the market)
doesnt pick up," he said.
A move to cut flat-rolled
capacity could bolster pricing for commodity pipe and tube
products, which recently has been "aggressive not only on the
buy side but on the sell side," according to the first
On the demand front,
distributors have reported little change from what so far has
been a tepid year. "I dont see anything super exciting
going on. I would say its flat," the second distributor
Such sentiment is despite a
pickup in service center shipments in April, according to
Metals Service Center Institute (MSCI) data.
shipments of carbon tube and pipe totaled 236,900 tons last
month, up 5.6 percent from March and 3 percent from a year
earlier, according to the MSCI. U.S. distributors
inventories at the end of April were equivalent to 3
months supply, down slightly from the previous month but
up slightly from a year earlier.
Shipments by Canadian
distributors totaled 58,500 tons in April, up 12.3 percent from
the previous month and 3.2 percent higher than in April 2012.
Inventories at the end of last month were equivalent to 2.4
months supply, down from 2.7 months supply at the
end of March and 2.6 months supply a year earlier.