Steel pipe prices in Europe declined in the first half of April

Export quotations for welded steel pipes (S235) in Turkey decreased by $5/t in the first ten days of April to $592/t FOB, according to Kallanish. Demand from European companies was lower than expected, traders emphasize. Therefore, buyers are in no hurry to conclude deals, demanding a discount.

Under these conditions, pipe plants are unable to pass on additional costs to their selling prices. They arose after local producers of hot-rolled coils used to make pipes raised their requests for June deliveries by $20 per tonne.

The price of OCTG p110 in the North American region remained unchanged in the first ten days of April. Sellers’ offers were at $2350/mt FOB. According to them, oil and gas companies buy pipes only in case of great urgency.

The pessimism of oil and gas producers is related to the decision made on April 3 at the OPEC summit. The cartel members agreed to increase oil production by 135 thousand barrels per day in May, up to 411 thousand barrels. This means a significant inflow of additional resources to the market, and, as a result, a further decline in oil prices.

Under such conditions, companies have no incentive to invest in increasing production. This, in turn, cools demand for oil and gas pipes. In the first decade of April, the number of operating oil rigs in the United States decreased by 30 units year-on-year to 590 units.

As previously reported, from March 31 to April 9, Brent crude oil offers on the London ICE exchange fell from $74.6/bbl to $60.5/bbl. This led to a decrease in the cost of natural gas on major trading floors in Europe and North America.