Welded energy pipe producers face higher costs amid weak demand

Across the regions, producers of welded linepipe and oil-country tubular goods (OCTG) saw their margins shrink with substrate costs increasing in the third quarter of 2020.
Many have been attempting to protect margins with higher prices, with varying degrees of success. Europe-origin commodity-grade steel hot-rolled coil and plate showed price gains in September, with the HRC increases more successful than those for plate.
With the supply crunch in HRC slipping, and plate prices likely to be higher in the fourth quarter, the plate premium was expected to widen once more to the 2020 average. Similarly, for X65 plate and coil in Europe, non-sour coil prices showed gains while prices for sour and non-sour plate were unchanged in euro terms.
Asian X65 plate prices also showed gains in September, as did linepipe prices, except for Chinese export prices, which remained unchanged on reduced offers.
The Chinese domestic welded pipe market has kept up a strong momentum for nearly six months, offsetting the weak export market, but overall welded pipe demand was starting to fall with the slowing of the domestic infrastructure push.
Nevertheless, the demand outlook for large-diameter linepipe for 2020 was for positive year-on-year growth, a stark reversal from other regional markets.

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Post time: Oct-12-2020
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