Cautious Optimism in a Recovering Market
Welcome to the latest edition of InSight, our long-standing publication that delivers product lead times, pricing trends, raw material data and global commentary on market conditions for pipe, valves and fittings (PVF) products.
For the past two years, the global economy has grappled with a list of challenges, including a worldwide pandemic, production delays, labor shortages, raw material deficiencies and transportation bottlenecks. The Russian-Ukrainian conflict and soaring inflation rates in 2022 delivered further complexity to an already battered world market. While the energy industry is no stranger to disruptions and price volatility, the convergence of these factors triggered a unique situation that forced us to look for opportunities to keep the supply chain moving successfully. We emphasized the importance of forecasting and pre-planning, working with our transportation providers to deliver orders safely and on time, recommending alternate sources for approved materials and investing in technology – like our MRCGO™ platform – to enhance purchasing processes and drive efficiencies. Together with our suppliers and customers, we met the challenges and found solutions to continue delivering energy to the world.
Aided by an improving outlook for 2023, the energy industry enters this new year with momentum and a focus on both short- and long-term energy security. With cautious optimism, the International Monetary Fund recently raised its global outlook for the first time in a year based on a trifecta of improvement in the world’s top economies. Inflation rates in the U.S. are beginning a downward trajectory after hitting a 40-year high of 9% in June 2022. Mild temperatures across Europe have staved off a potential energy crisis. China’s economy is back open for business after Beijing finally dissolved its strict “zero-COVID” lockdown policies. While there are still risks, analysts are riding this wave of optimism and predicting a brighter year for our end sectors. According to the EIA’s Short-term Energy Outlook, crude oil production in the U.S. is expected to surpass 2019 records, led by activity in the Permian basin.1 The outlook for liquefied natural gas (LNG) is bright, with increased production in Europe and Canada, and the U.S. remains the world’s leading LNG exporter. Our gas utilities segment is a steady player, due to continued infrastructure improvements and integrity projects. Clean energy investments accelerated in 2022 and will maintain momentum in the coming years, sparked by government initiatives and heightened demand for long-term energy security.
Every day, our teams work diligently to uphold our corporate mission: to deliver superior service to our customers around the world and provide innovative supply solutions to enhance our customers’ operations. A global presence and supply chain gives MRC Global a unique perspective and ability to leverage both scale and scope to assist our customers through this dynamic time. Although we are emerging from what has been a gloomy and challenging climate, we remain vigilant. We will work together with our customers and suppliers to extract real value from the supply chain, so we can all enjoy growth as the market continues to recover.
Pricing and lead time information contained in this publication is current as of February 2023. It is difficult to predict market changes, lead times and pricing trends in such a volatile and inflationary market; however, MRC Global remains vigilant and can provide requested updates to our customers as information is available.