Steel pipe and tube sales 'sluggishness' reported

By Staff -- Purchasing, 2/8/2001

The "sluggishness" in the domestic steel pipe and tube market now is expected to continue for a while this year, suggests the latest business conditions survey of the Steel Tube Institute of North America. The Mentor, Ohio-based trade group says buyers can expect to see a continuation of the "extremely competitive" market that became apparent in the fourth quarter of last year. "Falling raw material prices have translated into extreme competitive conditions," the survey finds. "In addition, continuing customer inventory reduction programs have not subsided as expected, pushing replenishment orders downstream."

Tube producers' first-quarter forecast suggests shipments could be down 4% from fourth-quarter levels, partly because of seasonal declines and partly because of imports.

Shipments of mechanical tube increased by 5% in the first 10 months of 2000 compared with the corresponding period of the previous year. Reason: Drawn-over-mandrel product mills have reported market erosion since midyear. So, the survey suggests a 5% reduction in mechanical tubing shipments of this quarter because of a decline in demand from the automotive market and a general slowdown in the economy.

Shipments of hollow structural sections increased 7.5% through October compared with the same period in 1999. However, fourth-quarter business was so-so and HSS producers foresee a 3% decline in orders this quarter. STINA says that although some of the decrease is seasonal, customer inventory adjustments also are affecting volume projections. Shipments of standard pipe, in product sizes of four inches and smaller, were flat through October compared with the same period in 1999.

Shipments of stainless tubular products in the first 10 months of last year were up 3%, but were seen dropping by the same percentage in the fourth quarter. A major reason is the high level of imported stainless pipe and ornamental tubing.