Domestic & Import Pipe
Prices for both domestic and import pipe have been on a tear and seem poised to rise further over the next couple months.
ITC shoots down Section 337 trade case against China
In a ruling that surprised many observers, the U.S. International Trade Commision delivered a complicated decision ruling against U.S. Steel’s Section 337 complaint charging China with violating antitrust laws, stealing trade secrets and evading import duties. The petition aims at banning all Chinese carbon-steel and alloyed-steel products from the U.S. market. The ITC ruling hinged on a legal technicality by which the judge determined antitrust claims do not fall under Section 337 jurisdiction. A possibility remains that this ruling may be overturned by the six-member ITC. A hearing on the remaining issues involving the theft of trade secrets and evading import duties is scheduled to begin on July 31, 2017.
Commerce to see if China circumvents U.S. tariffs via Vietnam
The U.S. Department of Commerce (DOC) has agreed to investigate charges by the top U.S. steel producers that China is shipping products bound for the U.S. through Vietnam so that the steel products could be classified as Vietnamese and assigned the lower tariffs charged on Vietnamese steel. U.S. Steel, Nucor, AK Steel and ArcelorMittal claim a typical ruse is for Vietnamese companies to add zinc to the product for corrosion resistance and sell it abroad as product “made in Vietnam.” U.S. steelmakers insist coating the steel involves “(a) relatively small investment (that) adds relatively little value and adds no components or mass whatever.” Domestic steel makers also charge that Vietnam converts Chinese hot-rolled coil into cold-rolled in order to avoid U.S. tariffs on cold-rolled coil from China.
Iron ore prices were surging to their highest level since 2014
A benchmark of $78.50 per ton on November 25 represented a gain of 29.75% in the last month and 74.44% during the last year. Prices sagged a bit to the $72 range as November drew to a close. Iron ore’s all-time high was $191.90 in February 2011, and fell to a record low $37 in December 2015.
Welding fittings and flanges
There has been little change since last month’s report, although market conditions have improved slightly. On December 2, the Baker Hughes Rotary Rig Count for U.S. gas rigs increased to 119, up by 11 since October, and U.S. oil rigs were up 34 during the same period. Benchmark crude was at $50.72 per barrel on December 8, up $0.42 since October. Natural gas prices are up $0.32 per Dth since October, closing the week at $3.67 Dth (as of December 9).
It remains unclear how much rebound in activity the upstream markets in the U.S. will see with OPEC agreeing to a reduction in production. Speaking with multiple manufacturers and distributors, there is optimism the Trump administration will be more beneficial to the energy industry than a Clinton administration would have been.
The outlook remains unchanged since last month’s report as the forged-steel fitting market remains relatively soft. Major markets such as upstream oil and gas still are being affected by low oil production rates. Demand for raw material, SBQ (special bar quality), is still soft leading to low input pricing. Forged- steel fitting fill rates are very high for both manufacturers and distributors throughout the country. Import material has continued to flow into the market, also creating strong supply. Pricing has remained stable and there are no foreseeable changes in the marketplace.