MECHANICAL CONTRACTING | PVF MARKET REPORT |
Market condition and activity bulletin-second quarter 2011
Stainless Steel Pipe Pricing:
another increase. Comments: One manufacturer
Stainless Steel pipe
pricing is expected to remain stable with lower surcharges offset by base price increases. Lead Times: Delivery lead times
are running 8-12 weeks, with fill rates of 20%-30%. Non-standard material delivery is out to 12-16 weeks. Comments: Inventories are
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intentionally being kept lower due to price volatility. One manufacturer noted that deliveries move out slightly, then come back in after a week or two showing a very inconsistent order pattern. Some nickel alloy “remelt” grades are booked through the end of the year. Some industries are busier than others, leading to overall inconsistency in activity and pricing levels.
comments that commodity prices have remained at elevated levels with greater global demand than expected. PVF markets should be much stronger this year due to increased demand, higher prices, and oil prices soaring. There is too much capacity for both manufacturing and distribution. The master distributor has re-shaped the market structure and will continue to move into closer distribution channels with end-users. Another notes that it appears that business has improved slightly. Hopefully, this will continue. As prices rise, demand normally increases due to the fear of how high they may go. Pipe prices and the availability of plate and strip are the big issues effecting the stainless fitting and flange market. Everyone wants everything yesterday.
BY GARY
CARTWRIGHT PIPING AND
EQUIPMENT INC. Comments: Recently more than a
dozen U.S. Senators called for trade relief for U.S. steel producers, saying the industry is hurt by unfair practices by steelmakers in places such as Brazil, Japan and Russia. The senators are calling for relief for the U.S. steel industry, having sent a letter to the chairman of the U.S. International Trade Commission in advance of an April 6th , 2011 hearing to determine whether hot rolled steel imports from Brazil, Japan and Russia are having a negative impact on the domestic hot rolled steel industry. The senators claim several Ohio steel producers will be affected by the commission's decision including AK Steel Holding and Arcelor Mittal, steel pipe and tube producers that rely on U.S. hot rolled steel as their input to make pipe and tube. Among the other large U.S. steel producers are Pittsburgh based United States Steel Corporation and Charlotte based Nucor Corporation. The current steel market has been much more stable than in recent months. Manufacturers indicate it is unclear whether real demand will improve in the second quarter, or if destocking will offset any gains.
Stainless Steel Weld Fittings, 150 and Hi-Pressure Fittings
Pricing: (Weld Fitting 150#)
(SS Pressure Fittings) Manufacturers report increased prices from 3%-7- 1/2%. Nickel prices are up significantly and inventories reduced thus causing increased prices. Allegheny has gone up 7%-9% on strip for pipe. Surcharges for May will probably go back down to the March numbers; otherwise, the prices may have increased further. Labor and material costs have drastically risen in China and India with both countries having rapid growth and accompanied inflation. Lead Times: Fill rates are running
75% to 85% with lead times of 4-6 weeks for commodity domestic material and 8-12 weeks for import material not in stock. Look for deliveries to go out further due to pipe extended deliveries. Some mills over-booked at low prices and are now suffering from extended lead times. Nickel was on a steady rise, but then has dropped off a little. Due to the crisis in Japan, we may see
Stainless Steel Flanges Pricing: Manufacturers forecast
price increases averaging 5% for stainless steel flanges. Labor and material costs have drastically risen in China and India. Both countries have rapid growth and accompanied inflation. Lead Times: Fill rates are forecast
for 60%-75% with lead times of 4-6 weeks domestic and 8-12 weeks foreign. Specialty flanges are out 12- 16 weeks. Comments: Rising costs for raw
materials, supply, demand and reduced on hand inventories are causing increased prices. Nickel prices have risen significantly in the past year reflecting higher raw material prices.
Carbon Steel Pipe-Seamless, ERW and Continuous Weld
Pricing: Welded pipe has
increased 28% since January and seamless may be increasing soon. Lead Times: Fill rates are running
at 75%-90% with lead times of 8-12 weeks.
Carbon Steel Weld Fittings and Flanges
Pricing: One manufacturer
predicts pricing will remain stable through the second quarter on carbon steel fittings and forged steel flanges and another indicates an 8%- 10% increase in carbon flanges. However, due to the unstable world conditions unexpected changes could occur. Lead Times: Fill rates are running
90%-100% or more for fittings and flanges. Deliveries for material not in stock is forecast for 3-4 weeks. Non- stock specials are forecast for 6-8 weeks. Comments: Demand and stable
costs of raw materials have kept pricing stable or only rising slightly. While prices for raw forgings have risen somewhat, the rise has not precipitated an increase in pricing as of this writing. The 2011 market is expected to see demands similar to that of 2010. Most of the major construction projects will be funded by some form of government funding either at the local, state or federal level. The extension of the Bush Tax Rates
phc june 2011
www.phcnews.com
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