Line Pipe

Jim Dionisio

BD & SCM Energy Tubular Products

linepipe@mrcglobalinsight.com

MRC Global anticipates growing demand for line pipe throughout 2014 as forecasted capital spending increases make their way into the marketplace. For some, results are already foreseeable as distributor order fulfilment increases and large midstream projects become visible on the horizon. Seamless pipe product demand is also likely to grow, as postponed refinery maintenance and general industrial activity have the potential to drive requirements.

In the US, colder-than-normal weather during the 2013-2014 winter months is likely to impact natural gas activity. Drilling is expected to increase in the latter half of 2014, driven by the necessity to replenish consumed resources. Initial projections place growth in the 2% range for 2014, pending supportive average spot prices1.

During 2014 and beyond, the line pipe market will continue to manage the increasing number of manufacturing mills coming into play, creating an ample supply of product in the market. At present, demand factors have equalized lead times across all product lines, but can be expected to extend as order numbers increase. For manufacturers, the growing cost of line pipe raw materials remains a focal point and could impact future product price trends as demand for product increases.

1 Spears & Associates, "Drilling and Production Outlook," March 2014.

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