buoyant flat steel market and rising raw material prices resulted in large price rises for welded pipe products across all regions in January 2021.
Increases in the price assessments for helical submerged arc-welded (HSAW) pipes were of the magnitude of $140-190 per tonne, with the exception of Europe, where prices were stable.
Longitudinal submerged arc-welded (LSAW) material prices increased by $100 per tonne and $150 per tonne in China and the United States respectively, but by a lesser extent in other regions.
Fastmarkets’ research team forecasts that the steel substrate and raw materials markets are about to decline, although not sharply. This will drive some welded pipe price reductions by mid-year because fundamentals are not yet sufficient to support elevated prices for a prolonged period.
In the US, we expect prices to continue to trend higher through the second quarter of the year, with mills catching up with some lost margins while hot-rolled coil and plate prices moderate.
A slight retreat in welded pipe pricing is expected in the third quarter. Nevertheless, demand for electric resistance-welded oil-country tubular goods (ERW OCTG) and linepipe is expected to rise modestly through the year with drilling activity rebounding, so no price crash is forecast at this time.
Meanwhile, margins for European linepipe producers fell further across most products in January, despite price increases. And European plate producers also saw their premiums falling sharply relative to non-API (American Petroleum Institute) plate.
We believe there is not much left to cut, especially because capacity utilization has improved since the peak of the Covid-19 pandemic, reducing incentives for fire-sales.
New measures introduced to control a resurgence of the pandemic in China have made it more difficult for mills to supply raw materials, and helped to drive up prices in the seaborne market. This adds to the problems of an already tight market in India.
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