Bulletin 97-10

Piping & Equipment, Inc.

Market Condition & Activity BuIIetin

PIPING & EQUIPMENT-- A Member of AD October November December 1997

BARSTOCK OR FORGED?

Industry standards have previously been somewhat ambiguous in regards to the specifications of starting material used in the production of flanges, mainly 300 series and exotic alloys such as monel, nickel, etc. "Short-liners" and machine shops loosely classified as manufacturers have taken advantage of this ambiguity by providing flanges, first cut from barstock, then machined to slip-ons, weld necks, threaded flanges and so forth, mostly in small sizes. Ostrich-like, most purchasers opted for expediency over pedigree of product, either unschooled or indifferent to the differences in barstock and forged.

ANSI / ASME B16.5, Feb.25, 1996 edition addresses the use of barstock in the production of flanges. There was a question as to whether flanges manufactured from barstock met B16.5. Interpretation 2-26 in the February edition is very clear. The answer is no. Further, paragraph 5.1 states. "Ranges and flanged fittings covered by this standard shall be castings, forgings, and (for blind flanges only) plate as listed in Table 1A. "Blind flanges may be produced from plate and must be marked with the appropriate specification. In regards to marking, the 1996 version of B16.5 further states:

4.1 General. Except as modified herein, flanges and flanged fittings shall be marked as required in MSS SP-25.

4.1.1 Name. The manufacturer's name or trademark shall be applied.

4.1.2 Material.

(a) Cast flanges and flanged fittings shall be marked with the ASTM specification, *grade identification symbol and the melt number or melt identification.

(b) Plate flanges, forged flanges, and flanged fittings shall be marked with the ASTM specification number and grade identification symbol

(c) A manufacturer may supplement these mandatory material indications with his trade designation for the material grade, but confusion of symbols shall be avoided

(d) Flanges and flanged fittings manufactured from material which meets the requirements for more than one specification or grade of a specification listed in Table 1A may be marked with more than one of the applicable specification or grade symbols. The symbols shall be placed to avoid confusion in identification.

4.1.3 Rating Class. The marking shall be the applicable pressure rating class: 150, 300, 400, 600, 900, 1500, or 2500.

4.1.4 Designation. The designation Bl6 shall be applied, preferably located adjacent to the class designation, to indicate conformance to this standard.

4.1.5 Temperature. No temperature markings are required on flanges and flanged fittings, but if marked, the temperature shall be shown with its corresponding tabulated pressure rating for the material.

4.1.6 Size. The nominal pipe size shall be given but may be omitted from reducing flanges and reducing flanged fillings.

4.1.7 Ring Joint Flange. The edge (periphery) of each ring joint flange shall be marked with the letter "R" and the corresponding ring groove number.

*The ASME Boiler and Pressure Vessel Code, Section 2 specification number may be substituted provided the material is covered by Section 2.

Our sincere thanks to Mr. Gary Bouffard

of Ideal Forging for the contribution of this article

Pricing /Stainless Steel pipe list prices were increased on 9/29/97 by 2% on 304L and 4% on 316L by several major producers. This increase has the raw material surcharges built into the list price, which in effect keeps the prices flat. During the last quarter, there were some manufacturers who reduced prices on spot buys from 3 to 5%. Pricing is still very competitive by domestic producers. The comparatively strong U.S. dollar versus foreign currencies has hindered export opportunities for U.S. producers.

Lead times are running about the same as last quarter 4-6 weeks on standard stock material.

Fill rates are running around 70% due to a relatively soft order intake in August and early September, which enabled producers to "catch up" on inventory plan deficiencies. Lead times on non-stock, special "exotic" items are running 10-12 weeks. Raw material lead times have remained stable.

Comment: - Molybdenum price per pound remains around $4.20 and Nickel has decreased from $3.40 per lb. In May to approximately $3.12 per lb. at the end of September. Final determination against Ta Chen on the 31.9% anti-dumping duties is still pending.

Pricing \ Stainless steel Buttweld fitting prices are really taking a beating. Expectations are that prices will continue to decline by 3-5% this quarter. Demand for this product has been very low over the summer, and manufacturers are looking to move product by lowering the prices. Due to these pricing declines, distributor stock orders are minimal.

Lead time on domestic commodity items are 1-3 weeks with imports running 16-20 weeks. Tangential fitting deliveries are 4-6 weeks with fill rates at 60-70%.As you would expect, fill rates

on domestic commodity fittings are at 8O-90%. Most inventories are excellent and will remain constant until there is a demand upswing. Lead times on non-standard special "exotic" items are running 4-6 weeks.

Comments - As with stainless steel pipe, we are awaiting final determination on the dumping duties on Ta Chen. Some sources report that import fittings from Europe and Malaysia are definitely on the rise.

Pricing-- Not much happening in this product group on domestic or commodity items, pricing is expected to stay flat for the quarter.

Lead times will remain in the 1-3 week range with fill rates in the80-100% category. Demand was down during the third quarter, which allowed

manufacturers to round out their inventories. Non-standard items are taking 2-3 weeks to ship.

Comments - There are some reports that import products are increasing from China, Europe, Japan, Israel and Taiwan.

Pricing -- Domestic commodity flange prices are expected to drop 3-5% this quarter. New price sheets are not expected to be published; Just a decrease in the multiplier, which can be adjusted at any time if demand really picks up.

Lead times have improved to 2-4 weeks and fill rates are running at 70-90%. Demand was down during the summer and that allowed the

manufacturers to build inventory. Non-standard items are requiring 6-8 weeks for shipment.

Comments - It appears that imports are increasing from Korea, Italy, Spain and the Philippines. Also, we understand there is a dumping suit in effect against India.

Pricing-- Carbon Steel Seamless Pipe prices are not expected to change this quarter. A price increase of $20 per ton was announced in September to go into effect January 1, 1998 on 2" through 10" by U.S. Steel and North Star. Commodity items are shipped from stock 70-80% of the time with lead times being 12-16 weeks, if not in stock. Primarily on 4" through 8" seamless -oil country demand is causing the longer lead times. Dumping suits continue on 41" and smaller seamless against Italy, Germany, Brazil, and Argentina. This is resulting in an increase of seamless from Eastern Europe, South Africa, and China.

Continuous Weld Pipe prices are expected to increase 1-2% this quarter. Three out of four manufacturers have announced

an increase. Whether this increase will "stick" remains to be seen. Zinc for galvanized pipe has increased over 50% this year, and we may expect increases on galvanized pipe in the near future. Continuous weld pipe is an "off the shelf" item and is shipped from stock 100% of the time. Foreign pipe has about 50% of the U.S. market on standard CW pipe.

ERW Pipe prices are not expected to change this quarter. Actually, last quarter we saw a 1-2% increase on 4" through 6" and a 2-3% increase on 8" through 16".

Lead times are running the same as last quarter at 6-8 weeks. Shipments from manufacturers stock are 40-50% complete, which is down from last quarter.

Pricing--Carbon Steel Weld Fitting prices are expected to increase by a weighted average of 3% around the 1st of the month. This increase is reportedly necessitated by the higher cost of pipe, which has increased 3 times since December 1996.

Carbon Steel Flanges are expected to remain stable for this quarter.

Lead times for both fittings and flanges on commodity Items are running 3-4 weeks. Fill rates on commodity fittings and flanges are 80-90% from stock. Non-standard flange lead times are 12-16 weeks and fittings are 6-8 weeks.

Reports indicate that import fittings from Mexico, Thailand, Taiwan and France are on the increase. Also, Flanges from Italy, Germany and Spain are reportedly on the increase.

Pricing-- Forged Steel fitting prices are expected to be flat again this quarter.

Lead times for shipments out of manufacturers stock are running around 60-70% with lead times on stock commodity items running 3-4 weeks. Demand is strong on forged steel in oil patch. Non-standard items are 2-3 weeks for delivery.

Pricing-Pricing-- There is still the possibility of a 3-5% increase during the 4th quarter, but some manufacturers feel it will be at least the 1st quarter 1998.

Lead times on commodity items remain in the 6-8 week category. Fill rates are running in the 80-90% range. Expectations are that deliveries should improve by the end of October, as some manufacturers get out from under the flood damage. Non-stock and specials are still in the 16-20 week lead time area.

Pricing-- No price changes expected this quarter.

Lead times are improving from 4-6 weeks last quarter to 3-4 weeks this quarter. Some forged steel valve manufacturers have adopted the JIT manufacturing process and do not carry finished product in stock.Stock of finished goods is maintained at the distribution level. Special non-commodity lead times are 8-12 weeks. As domestic lead times improve and domestic pricing stays competitive, the import products market share declines.

Pricing-- Bronze and Iron prices are expected to remain stable for this quarter. Bronze valve sales appear to be flat, while iron valve sales have increased slightly.

Lead times on most bronze and iron valves are shipped from stock, except specials which may run around 8-12 weeks.

Pricing--Pricing should remain about the same this quarter. Reports indicate that overall demand is down, and supply is good as evidenced by the fill rates of 90-100% on standard commodity items.

Lead times have improved to 4-6 weeks from 6-8 weeks the last quarter. Non-stock and specials are still running 12-16 weeks. Any large projects this quarter will probably receive very competitive pricing.

Pricing-- Ball and Wafer valve manufacturers do not expect any increases this quarter. During the last quarter, prices increased 3-5% due to labor and raw material costs. This was an industry-wide increase and it appears to be holding.

Lead times on standard product is running 4-6 weeks, which is a little longer than last quarter. Specials and "exotics" lead times are continuing at 16-20 weeks.

@ 1997 Piping & Equipment. While we recognize that imitation is the sincerest form of flattery, any unauthorized reproduction of any portion of this document is forbidden without the written permission of P&E.

� 2009 Piping & Equipment, Inc.
June 19, 2009