Industrial PVF prices have been so volatile this year, the biennial IPD Commodity Reports, published in July by the Industrial Piping Division of the American Supply Association exclusively for IPD members, was acknowledged by its authors to be largely out of date in the weeks it took from compilation to printing and distribution to the membership. Although this may be true for the hard data reported, the panel of IPD wholesalers and manufacturers that put together the report did a terrific job putting this self-described “wild and wacky” year into proper perspective.

“It is obvious that basic economic forces are in play,” commented Sheldon Nierman (Independent Pipe & Supply Co., Canton, Mass.) and Pat Adams (Missouri-Kansas Supply Co., Kansas City, Mo.), authors of the steel pipe section. “Sooner or later, supply and demand will reach a balance with the real question being, 'At what price?'

“Buyers normally try to hedge buy to beat announced increases. This time, increases came so fast and without warning, it resulted in an increase in demand, which ended in some 'double' ordering and then to panic buying. Real demand is up only 1-2% for the year,” they observed.

Nierman and Adams concluded that “steel prices are showing signs of moderating, as some U.S. steel makers reduce the extra surcharges they had levied on their customers. Still, steel prices remain relatively high amid strong demand, and some steel makers are seeking to offset declining surcharges by raising the base price.”

The authors' assessments generally applied across the segments of carbon steel, ERW, CW and seamless pipe.


This section of the Commodity Reports was researched and written by Tim Collins (Pipe-Valves, Inc., Columbus, Ohio) and Mike Cowden (FNW Valve Co., Portland, Ore.) Their assessment of the grooved fittings market concluded that “sales of domestically produced grooved fittings will remain very strong in the nonresidential and industrial construction markets during mid- to late 2004 … Foreign product in the U.S. will continue to decline, according to manufacturers, as foreign producers focus on the market in China.”

Assessing malleable and cast iron fittings, Collins and Cowden said: “Overall, domestic pricing will more than likely increase again by 5% as early as August or September to keep even with the raw material and benefits cost increases. There is no cost relief in sight for the balance of 2004 and, in all likelihood, increasing costs will continue into 2005.”

For carbon steel weld fittings and flanges, the IPD reviewers commented: “As the last update was being written, warnings were given in regard to large price increases. Unfortunately, those early warnings were only the beginning for the unprecedented inflation of these products. Weld fittings have increased in the 30-40% range, and flanges 10-20% higher than that. While pricing has stabilized in the last 60 days, there are further warnings of high prices in the third or fourth quarter.”

Collins and Cowden said that “forged steel fittings were one of the few items that did not increase in the first half of 2004 … An attempt to raise prices in the 7% range is in the marketplace now, with an August time frame. We will have to wait to see if the market accepts this increase.”


“While the consensus is that the first half of the year was wild and wacky, the new times in the valve industry were a milder version of wild as compared to other PVF product industries,” concluded valve segment researchers Jeffrey Beall (American Pipe & Supply Co., Birmingham, Ala.) and Guy Mersereau (Westlund, Edmonton, Alberta).

“It has been years since the industry has been able to get enough of a price increase through to stay ahead of inflation. When the demand for material is sufficient to allow for prices to rise, most manufacturers view it as catch-up time only. The increase seen this year should remain, but will level off as supply and demand get back into balance,” wrote Beall and Mersereau.

Stainless Steel

Gary Cartright of Piping & Equipment, Inc. based in Houston, was this sector's analyst. “There are reports that U.S. stainless inventories are at a record high, which means stainless production should slow in the latter half of 2004, and that the bonanza for stainless producers earlier this year could be coming to an end,” said Cartright.

“China reports the fourth consecutive month of slowing industrial growth, which is evidence that their attempt to slow the economy without crashing is working. With China's temporary exit from the market, worldwide demand for alloy steels is not reaching the hectic level that characterized this year's first quarter,” he noted.

“Since the Chinese have reined in their stainless purchases noticeably since March, it is predicted that they will be back in the market by late summer or early fall. High demand for stainless in overseas markets, and the weak dollar, have discouraged imports to the U.S., but that situation may change,” said Cartright.

Industrial Thermoplastics

Mike Cowden's review of this specialty sector took note of steep PVC resin price increases, from an average of 45 cents per pound in early 2003 to more than 60 cents by mid-2004. “The continued upward spiral of natural gas prices is a concern for PVC producers and presents a considerable challenge to the U.S. economy as a whole. All of these factors will challenge industrial plastic manufacturers of PVC products to maintain their margins.”

Cowden also observed: “Industrial plastics manufacturers are increasingly looking at the crumbling infrastructure of municipal water distribution systems in the U.S. as a potential destination for their products. Infrastructure rehabilitation is expected to be a huge market for years to come as cities scramble to replace aging water distribution systems.”