Current situation:
- Valve prices, according to the Producer Price Index, were up month-over-month in February by 0.1% (also up 0.2% M/M last month). On a year-over-year basis, prices were up 2% (up 1.2% last month).
Key factors that could affect supply or price:
- We have not seen any production delays in Asia from the coronavirus. Domestic inventories have been building on industrial valves and lead times continue to soften. Most companies need oil to be $45 / barrel to carry sustainable margins and $60 / barrel to be significantly profitable. Depending on how the OPEC discussions proceed with Russia and Saudi Arabia, demand can go way down for industrial valves if oil stays near $30 / barrel.
