Why Steel Pipe Doesn’t Always Follow the Steel Market.

Steel pipe is separate from the steel market due to one major factor, steel pipe is price driven by coil versus general steel shape products such as angle, channel, and beam.  Coil must be made from a slab (vs a billet) and that coil market drives the pricing in the steel market.  Coil is used in the automotive, appliance and any other industry that uses sheet.  Since coil may be in short supply or high supply it is the availability and price of coil that drives steel pipe pricing at any given moment.   

Another factor to consider is that steel may be in surplus but coil and steel pipe may not be. An example of this is, typically mills only make one size and wall thickness at a time.  For example, if a steel pipe mill is rolling 16” x .375 wall pipe now, it must do a “changeover” to make  a different size such as 14 “ x .312 wall pipe  and that process can take weeks.  So imagine there is a shortage of 16” x .375 wall pipe in the market but demand is limited.  The steel pipe mills will not be highly motivated to roll this product therefor creating shortages in the market for those that do require that size now.  This can drive up prices on that size well above market value for other sizes as it is needed to complete current jobs.

Next, not all mills roll all sizes so it isn’t as simple as ordering it somewhere else.  Most mills roll in ranges 1”-4”, 6”-16” or 18’ to 24” and so on.  Therefore it is to your advantage to understand where the mills are located in the united states that roll the sizes you use. Pricing will be affected by the distance the product must be shipped and timing must be evaluated to meet rollings off the mill.

Lastly, you may want to consider surplus.  A surplus pipe is sold by dealers who buy excess inventories leftover from projects, or canceled projects.  Many times these surplus inventories retain test reports, stencils and have never been used.  These surplus inventories can help you fill the gaps created when mill schedules do not meet your needs or when pricing does not meet your budget.  A tip for you is to look at alternatives when you cannot find the size you want or if pricing does not fit your budget.  When one size is in short supply or overpriced there is usually a size that is in abundance and priced right elsewhere.  A good dealer can help you with section modulus, pressure and flow characteristics to help you find the right alternative.  

So, do not just assume your steel pipe will be priced lower when steel prices drop.  The factors of supply, coil availability, and rolling schedules can have dramatic effects on your pricing of your next steel pipe order.