Carbon Steel Pipe, Fittings & Flanges

Fittings & Flanges

Lead times and availability for carbon products, in general, are stabilizing. Strong demand for carbon fittings and flanges is expected to continue for the near term. Despite the increasing demand, prices for carbon weld fittings have cooled in recent weeks because of the softening of seamless pipe pricing. However, prices for carbon flanges could increase in the first half of 2023 due to the elevated cost of raw materials, which is putting upward pressure on the cost of finished goods. The forged carbon fitting segment is also steady, and products are readily available. Energy costs have caused recent, modest increases in normalized product due to natural gas consumption used in the reheating process, but prices have now stabilized. While lead times for seamless pipe nipples and swages are flat, volatility in seamless pressure tubing, the raw material for these products, continues to drive prices upwards.

Line Pipe

After experiencing extreme volatility in 2021 and 2022, high frequency welded (HFW) pipe pricing and deliveries have stabilized significantly over the last six months. Hot rolled coil (HRC) prices, which are the primary cost driver for finished HFW pipe, has also settled and seems to be holding steady. Pipe manufacturers have experienced a significant increase in demand for product, which has supported elevated prices that would normally come down in step with falling steel prices. Mill lead times have pushed out and vary depending on the size range of the pipe. Smaller outside diameter (OD) pipe (2” through 8”) is readily available with quick lead times, with only some stock available at the mills. There is a significant demand increase for 12” through 20”. Lead times for these sizes have pushed out much longer. 24” pipe is the most critical size for planning, as there is the anticipation of a severe deficit of this size in the market. Several factors are contributing to this unique situation, including the closing of one of the primary 24” domestic U.S. mills, as well as some major projects being purchased in late 2022 that are tying up the remaining capacity for 2023.

Seamless (SMLS) pipe has peaked at an exceedingly high price level, due mostly to the demand for Oil Country Tubular Goods (OCTG). Capacity at the pipe mills continues to be allocated in favor of OCTG, leaving little tonnage remaining for line pipe. Seamless pipe inventories seem to have finally caught up with demand after an incredibly challenging first half of 2022. Mill lead times have pulled back, allowing distribution to restock and prices to stabilize. However, there is a severe shortage of pressure tubing (<2” SMLS pipe) caused mostly by a supply disruption from the two U.S. domestic mills that provide the majority of pipe to the energy, industrial, and gas utility sectors in the U.S. Supply constraints and labor issues have led to a lack of output, causing many original equipment manufacturers (OEMs) and end users to make up for the shortfall with welded options or non-approved manufacturers. 20” and 24” SMLS pipe is still increasing in price due to the limited amount of global manufacturing available, with the bulk of the supply in those sizes coming out of Europe.