MRC Global InSight

Carbon Steel Fittings & Flanges

So far, 2018 has been a year of strong demand for fittings and flanges. As the effects of Section 232 settle down in the U.S., prices of weld fittings and flanges have generally begun to stabilize. Capacity utilization among key manufacturers has reached a balance with demand, which has allowed lead times to shorten and distribution inventories to grow. High yield activity in the midstream sector is robust with several large OD transmission projects and active build out of smaller diameter gathering systems in areas such as the Permian Basin underway. Consumption of Grade B weld fittings and A105 flanges for industrial applications remains strong, but supply is keeping pace with this increased activity. With lead times steadily improving, we expect to benefit from higher than average inventories as we enter the turnaround season in the downstream sector. However, the recent government action against a prominent weld fitting manufacturer in Malaysia will remove significant capacity out of the U.S., and could potentially cause disruption of supply for commercial grade fittings.

Forged steel fittings is a commodity under price pressure. Demand for forged carbon steel fittings has been strong in 2018, and supply has remained robust. Although anti-dumping investigations have taken some import capacity out of the U.S., domestic manufacturers have absorbed the increased demand. Lead times remain relatively short and manageable, with no evidence or expectation of significant disruptions of supply. Inventories are currently strong with short replenishment cycles, which should lend itself to a busy but uneventful fall turnaround season.

Demand for seamless pipe nipples, swages and bull plugs has also remained strong, and availability has been consistent with lead times being relatively short. Pricing, however, has trended upward in recent months due to increasing pipe prices. Demand for stud bolts has been strong, with lead times pushing out some in the first half of 2018.

The market for spiral wound gaskets remains strong, and availability has remained consistent. However, pricing on commodity spiral wound gaskets has increased significantly because products imported from China were assessed a 25% tariff as a result of Section 301.