Page 10 - ITAtube Journal 1 2023

Market information
Pipe manufacturers buy hot-rolled coils, round billets, or plates as input material for their production lines.
Figure 2: LNG Global Prices from February 2022 to February 2023 Source: International Monetary Fund, US Bureau of Labor Statistics
Figure 3: U.S. Domestic Hot-Rolled Coil Steel Futures Chart (average) 1 Year until 19th April 2023
Source: TradingView.com
10
More than 70 % of the total world pipe pro- duction, i.e. about 110 million tonnes/year, are welded tubes and pipes. Welded tube producers are highly dependent on attrac- tive hot rolled coil prices and OD pipe pro- ducers, on plate prices. Average prices for hot-rolled coils came down from early 2022 (ab. 1400 USD/ton) to December 2022 (ab. 700 USD/ton). Since then, the HRC prices strengthened again to prices of about 1200 USD/ton. Furthermore, tube producers suffer from shortages in the availability of special tube material specifications.
Steel plates were trading at an average of around1,000 USD/ton in November 2022, now in April 2023 low grade plates are traded at about 770 USD/ton.
Billet prices, used for seamless tubes are traded for an average of around 570 USD/ ton.
Since the year end 2022 almost all prices for tubular pre-materials became more expensive. It remains a challenge to predict the pre-material prices.
After the pipe price rally until mid-2022 (prices went up by 50%), now since then, the prices for tubular products weakened by about 13% (Figure 4).
Even the booming US demand was report- ing fading pipe prices. Until the beginning of October 2022, pipe prices in the US were still holding at high levels, but in November fears were being voiced from many regions that demand for pipes is weakening, which had an immediate impact on prices. The decline in pipe demand and its negative impact on prices is now faster than the decline in prices for the input materials hot- rolled coils, plates and round billets. This challenges some pipe producers since they face margin losses.
As a representative example Figure 5, shows the price development for two rep- resentative tube types since June 2022:
- P110 OCTG O.D. 5,5” alloyed casing pipes - S235 non alloyed structural pipe.
ITAtube Journal May 2023
Figure 4: Average Steel Tube and Pipe Prices Source: US Bureau of Labor Statistics