Q2/Q3 2019 Forecast Report
DOMESTIC CARBON STEEL PIPE
Domestic carbon hot rolled steel coil appears to have reached its bottom in early January, with the cost of HRC reaching $684 per ton. Since then, pricing has gradually risen, closing out March at $699 per ton. We can expect to see carbon steel pipe prices level off and remain steady through the third quarter. Most mills are running two shifts a day, five days a week, and delivery times are short. Demand is steady and most distributors are keeping inventories close to their chest.
DOMESTIC WELD FITTINGS & FLANGES
Pricing here has been steady for a while now, and we do not expect that to change in the next two quarters for domestic product. Price escalations on import weld fittings and flanges will continue into the second and third quarters, as we await final determinations of the ITC levied against Malaysia sighting circumvention. Supply is getting constrained as importers canceled many of their existing orders and are now struggling to find sufficient inventories to supply their own demand.
COPPER TUBING & SWEAT FITTINGS
Since early January the COMEX has gone from $2.56 a pound all the way up to $2.95 at the end of February, and has been holding pretty steady for the last four weeks around the $2.90 to $2.95 a pound range. We expect to see this trend continue into the second quarter, and depending on what happens in China, we may see the COMEX notch up in the third quarter.
STAINLESS STEEL PIPE & FITTINGS
Just as the Section 232 tariffs affected stainless steel pricing, so will the Section 301 tariffs. We fully expect ALL stainless pricing to continue to go up when these tariffs go into effect. Added ITC pressures and findings on import stainless steel products will continue to cause volatility in this market. We expect small but steady increases to continue into the second and third quarters.
BLACK MALLEABLE & CAST IRON FITTINGS
No increases are scheduled for this product segment in the next two quarters.
Victaulic put through a 9% increase across the board on April 4th. Gruvlok will follow suit and this should hold prices firm into 2020.
PVC PIPE & FITTINGS
The first quarter PVC fitting increases are in effect and will hold through the next two quarters. PVC pipe, however, continues to be very volatile. Manufacturers are considering increases as we head into the peak season demands. These increases have been held off by the sluggish global demand and lower ethylene and chlorine prices. However, we do expect to see a price increase to be announced in the third quarter for PVC pipe.
SOIL PIPE & FITTINGS
Price sheets dated March 1, 2019 with the proposed 8.5% increase have been held off until May 1, 2019.
COMMERCIAL & INDUSTRIAL VALVES
All of the commercial and industrial valve manufacturers put through increases in the first quarter. The most recent round of increases were between 3-5%. Other new increases are being held off to see what the determination is on the Section 301 extension period. On February 24, President Trump again postponed the 15% tariff increase scheduled to take place on March 2, 2019. This postponement is still in place as the United States and China continue with their trade talks. A resolution could come in the next five weeks. Stay tuned!
THANK YOU FOR YOUR PARTNERSHIP!
As always we want to thank all of our industry partners for your continued support into 2019. We continue to look for new ways to impact your field labor and bring real money savings to your bottom line through our field service offerings. We are expanding our Bulldog Cartage operation as well as our Porterfab offerings, and we continue to build inventory to bolster our fill rate. We always welcome any of your suggestions on how we can service you better and THANK YOU for allowing us to serve your PVF and HVAC needs in 2019.