Current situation:

• Valve prices according to the Producer Price Index were up .1% M/M in February and a much sharper 5.4% Y/Y.

Key factors that could affect supply or price:

• Oil and Gas:  As mentioned previously in the report, the US is poised to see significant improvement in near-term oil and gas sector demand over the next 16 months. Global market conditions are ripe for continued investment in US oil and gas production. WTI and Brent both will stable demand – unless continued deceleration in European and Asian sectors continues.
• Chemical:  The US chemical market is one of the strongest in the world.  Demand for US products continues to climb and recent data out of the AAR shows chemical shipments up .1% Y/Y YTD. 
• General Industrial:  Nearshoring trends and international trade pressures are pushing more US-born industrial production. Most factories are running above 80% capacity and new construction of facilities should increase through the end of the year.
• Commercial Construction:  Year-over-year commercial construction spending was up 4.8% through the end of January. That should continue through the next quarter.
• Power: Capacity utilization for power generation was generally down to 77% through February. 80% is considered to be the key threshold in which pressure builds to construct additional capacity. The industry was consistently above 80% through the early 2000s, and has remained “moderate” since the Great Recession.
• Water:  Total construction spending on water supply was down at a -1.1% annualized rate vs. 2018 (through January).  There are still many public conversations about the importance of state and government spending on water infrastructure, but little has moved to jump start those projects on a national basis.

Commercial Valves

Current situation:

• The producer price index for industrial valves was flat month-over-month at 234.6. However, the index was up 3.3% year-over-year.

Key factors that could affect supply or price:

• Copper prices have remained essentially flat since the last two weeks of February, but are elevated from where they started the year.  That likely helped boost prices for commercial valves since the beginning of the year.
• Nickel is weaker, stainless, carbon, brass, bronze and iron are all stable. That’s largely why the entire valve price complex was generally flat month-over-month between January and February. 

The American Supply Association (ASA) and its Industrial Piping Division (IPD) is the national organization serving wholesaler-distributors and their suppliers in the industrial and mechanical pipe-valve-fitting industry.  As a powerful alliance of channel partners, we provide a forum for your upstream trading partners to exchange critical information and address key issues.

In particular, ASA’s IPD members constantly check the pulse of the materials and commodities they proudly supply to you.  ASA’s IPD members are knowledgeable industry leaders, and those who volunteer their service on the IPD Executive Council compile and prepare the IPD Commodity Reports.  The Reports contain some of the most current and qualified market data and information available from the industry’s leading manufacturers and distributors about emerging trends and other price-influencing actions and events.

This information is an example of how ASA’s IPD manufacturer and distributor members are constantly looking ahead to ensure you have information and resources you need to be successful.  Learn more at www.AdvanceYourAbility.com.