The bad news is nobody can really see a recovery on the horizon for the industrial PVF market, what with worldwide over-capacity for most industrial goods. The good news is, well, there's at least some hope the bottom has been reached, and most manufacturers and distributors belonging to ASA's Industrial Piping Div. (IPD) have weathered the storm.

More specifically, here is a summary of July's biannual Commodity Reports from the IPD. More detailed information is available to IPD members exclusively via the Commodity Reports newsletter.

Carbon Steel Pipe

Total import/domestic tubular tonnage finished with a volume of around 12.5 million tons last year. That was a significant drop from 2001's 14.1 million and 2000's 14.6 million tons. Put in perspective, though, it was still above the 12.2 million tons shipped in 1999, and 2000-2001 were the best years since the early 1980s. IPD regards 2003 as too speculative to even hazard a guess. "For things to really improve for tubular products, we need to have a national resurgence of capital spending in the refinery and power piping sectors," say IPD member analysts Phil Knipper and Sheldon Nierman.

The industry is entering phase two of the Section 201 tariffs that were enacted since March 2002, and which have been responsible for what IPD deems a "roller coaster" ride with pricing. Certain tubular products have gone from a first year tariff of 15% to a present 12%. A mid-year review of the tariffs is scheduled for September.

CW Pipe: The May labor strike at Wheatland's continuous weld mill had little effect on the price of goods, because Wheatland was able to produce and ship off the Sawhill plant they bought last year. Lackluster demand has seen Wheatland and Sharon Tube producing at reduced hours. Imports still grab more than 50% of this market. Prices went up about 6% between Sept. 2002 and March 2003.

ERW: "Price swings have created havoc on margins for both distributors and manufacturers," say the authors. "The trick is to have the right amount of inventory at the right cost based on current demand conditions ¿a steel buyer with psychic predictive powers would be good to have on staff," they quipped.

Seamless Pipe: A soft market has led to very little price changes for the past half year and more. Except for OCTG, "some of the mills would be in dire straits." The domestic market is inundated with foreign product from both Eastern Europe and China, although European mills are finding it difficult to be profitable in the U.S. due to the rise in value of the Euro.


Grooved Fittings: Sales for domestic grooved fittings remained strong in commercial construction markets, particularly in education and health care construction. Industrial sales were constant but realized no significant increases. The fire protection market continued to feel the pressure of an influx of foreign product, with more than 70% of imports coming from China.

Malleable Iron & Cast Iron Fittings: Domestic producers were cheered by the June determination that China was dumping malleable fittings in the U.S. Duties have been placed on that country's product from a low of 4.96% to a high of 146.4%.

Nonetheless, IPD fittings report authors Mike Cowden and Gene Strine noted that the finding is preliminary, and "many of the Chinese foundries produce under many different logs and name brands, so it is to be sorted out which brand fitting gets hit the most, and what the final result really is when the final ruling comes in late September."

Traditional PVF sales have been down 18-20% during the last year, say the authors, although they expect to see about a 6% growth during 2003.

Domestic Carbon Steel Nipples: Section 201 price swings have impacted this sector of the industry as it has full-length pipe. Yet another price increase was slated for July.

Domestic Carbon Steel Weld Fittings & Flanges: Domestic demand remains flat. Fittings from Korea, Taiwan and Malaysia, and flanges from India, are selling for as much as 30% below domestic prices. Weldbend, the only remaining domestic producer, has expanded capacity of fittings and flanges up to 48-in. The Italian manufacturer Tech-Tubi is in bankruptcy. Allied Fittings will take over when it gets out of bankruptcy.

Carbon Forged Steel Fittings: "This is a market that continues to be hammered by overcapacity worldwide," say the authors. "On the positive side, inventories are at historical low levels along with interest rates. Any improvement in manufacturing will result in an immediate increase in business."


"The North American industrial valve business continues to struggle as big industry continues to delay or cancel renovation and capital projects," declared IPD valve analyst Larry Pearson. A big discrepancy exists in reports of market conditions. Some major industrial valve manufacturers report first-half sales down as much as 20%, while other industry sources say it's essentially flat. "The 20% number seems more realistic," says Pearson.

The power generation market has taken the biggest hit. Pulp and paper and chemical/petrochemicals also are severely depressed. Gas transmission and water and waste treatment are relative bright spots, "but there is not enough to go around to make everyone healthy."

Stainless Steel

Despite a fall in demand from China and sluggish consumption in the industrialized nations, stainless steel output seems poised to hit a record 20.3 million tons this year, report analysts Gary Cartright and Larry Dildine.

Stainless Steel Pipe: Domestic manufacturers increased pricing 3-5% during the second quarter. Commodity items not in stock are shipping in 6-12 weeks. Fill rates are running 70-80%.

Stainless Steel Weld Fittings: Deliveries are holding at two to three weeks for commodity items not in stock, with fill rates at 80-90%. Non-stock specialty items are showing four- to six-week delivery.

Stainless 150 & High-Pressure Fittings: Manufacturers increased prices 3-5% during the second quarter, and indicate another possible increase during the fourth quarter if projects become more active. Fill rates are 70-90%, with lead times of two to three weeks for commodity items not in stock.

Stainless Flanges: The second quarter closed with a 5-7% increase due to raw material costs. Lead times remain at two to four weeks, with fill rates of 60-80%. Foreign competition is increasing from Mexico, Italy and India, with a 35-40% difference in pricing.

Stainless Forged Steel Fittings: The forged stainless market will remain weak the rest of the year, as there is no sign of a pickup with the chemical companies. Imports and domestic fittings split the market about 50/50. "The split is very difficult to measure, because it is masked by all the short buys from various U.S. job shops."