InSight Magazine: September 2020

A Strong PVF Supply Chain

We are committed to creating value for our customers when they need us most.

This edition of InSight, our market update magazine, summarizes pricing and lead time trends for specific product groups and gives an overview of regional customer activity levels. The report is the result of input from our world-class, global suppliers and our team of supply chain management, business development and technical product experts.

We began 2020 expecting demand for pipe, valve and fitting (PVF) products to be similar or slightly down from 2019 levels. Then, a supply war between Saudi Arabia and Russia drove the price of oil down to historic lows and nearly simultaneously, COVID-19 was declared a global pandemic. Countries shut down all non-essential business and travel in an effort to slow the spread of the virus. This inactivity resulted in dramatically lower demand for energy products. Energy companies responded to the dramatic, quick changes in demand by postponing or canceling projects and turnarounds, cutting their overall capital expenditures (CAPEX) for the year and, in many cases, downsizing and restructuring their operations. All these events have had a direct negative impact on the global demand for PVF products and services.

In spite of what feels like a perfect storm of macro-economic forces, MRC Global is on solid ground. Our flexible and extensive distribution network, dedicated employees, strong technology platform and long-standing manufacturer relationships never stopped providing the PVF supply chain services that are essential to keeping our communities running safely and effectively – even in the midst of a pandemic. While it is no longer “business as usual,” with many employees working remotely and other safety measures in place, MRC Global has been and continues to lead our industry and stand alongside our customers as they navigate the new normal.

In general, the drop in demand has created an environment with shorter lead times. In addition, due to the quick nature of the change in demand, inventory levels for many products are sufficient to meet current demand. For many PVF products, manufacturers have also decreased their production to match current demand levels, which has insulated and stabilized prices. However, when standing inventories are depleted, we expect the PVF market will tighten quickly on reduced manufacturing capacity as demand picks up.

MRC Global has been formally gathering and providing this market update publication for our customers for 16 years. Our balanced mix of customers across the upstream production, midstream pipeline, downstream and industrial and gas utilities sectors gives us an unmatched opportunity to assess and respond to global market conditions to deliver a strong PVF supply chain. This is not the first global crisis that we have navigated together, and it will not be the last.

MRC Global will celebrate its 100th year in business in 2021; the resilience and creativity it takes to build an organization that lasts a century is not something that can be taught. It is passed down. That legacy is alive and well at MRC Global. We are committed to use this time of uncertainty to create value for our customers when they need us most.

Now is the perfect time to contact MRC Global for help simplifying and strengthening your PVF supply chain. Put our expertise to work for you. We are in this together.