Carbon steel pipe report: March 2019
- NYMEX domestic hot-rolled coil steel prices were $698 per ton through March 19. This was $20.00 a ton higher (2.9%) month-over-month, but $119/ton lower (-14.6%) year-over-year.
- The producer price index for steel pipe and tube fell from 298.3 in January to 289.7 (-2.97%) in February (latest available). However, year-over-year, prices are 18.2% higher (against easier comps in February of last year). US mills are still currently running at over 80% of capacity and there are active expansion efforts under way.
Key factors that could affect supply or price:
- Futures suggest that prices will inflate slightly into the $700-$710 range by Q2, largely on traditional seasonal movements in demand. Slowing European and Asian markets could impact global demand for HRC. However, a Brexit deal and Chinese Central Bank stimulus activity could boost construction and demand for HRC in 2H ’19.
- Oil prices were approaching $60/barrel in mid-March (up 22.6% over the past 90 days). Coupled with a slightly weaker US dollar (down 5% from a Jan 2017 peak), US crude oil exports could increase. Spring driving season and favorable national transportation activity should keep oil prices elevated, and US upstream production should increase with it, especially out of the Permian.
- US commercial construction spending surged to an annualized 2.4% growth rate in January, the strongest rate of annualized growth in 24 months.
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