Carbon steel fittings & flanges report: March 2019
- US producer prices for fittings and flanges on a national basis were up 5.2% Y/Y (4.6% in the last update) through February (latest available). They were also .5% higher M/M. Comparisons will get tougher over the next several months, rates peaked in June and July of 2018. Today’s rates remain at the upper end of a decade-high range
- Several factors continue to provide support for fitting and flange prices again in March. Demand remained steady in the US as upstream and downstream petroleum activity generally increased year-over-year. In addition, tariff and anti-dumping supply risk continues to add to price stability.
Key factors that could affect supply or price:
- The latest outlook from the Energy Information Administration shows that petrochemical demand will account for 33% of global oil consumption growth by 2030 and more than half of demand growth by 2050, surpassing oil use in fuel production for autos, trucks and aircraft. The US will continue to be the premier producer of globally-leading petrochemicals and the development of infrastructure, production facilities and distribution will make it a leading US growth sector.
- However, near-term sluggishness is still showing up in the latest Baker Hughes Rig Count for 03/15/19 where the US experienced a mild 36-rig increase year-over-year; but Canada was down 58 wells over the last 12 months. The net difference is a change in North American rig counts of -22 Y/Y. In the US, 33 of the ‘net new’ rigs were oil-based and 4 were gas. This should pick up in the coming months with challenges in Venezuela, moderate OPEC movement on curbing output, and a price-competitive US Permian market.
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