US domestic OCTG prices on perpetual neutral trend

Wednesday, 01 February 2012 02:18:13 (GMT+3)   |  
       

While oil country tubular goods (OCTG) mills continue to experience strong demand, there is much more upward pricing momentum in seamless and alloy products than for welded carbon material due to growth in more complicated types of drilling such as directional and horizontal. Seamless and alloy products are also less susceptible to import competition, according to trader sources, while there are numerous offshore mills capable of producing API grade J55 electric resistance welded (ERW) OCTG casing. Additionally, US domestic overcapacity is making oil well casing easier to come by on the spot market, and preventing mills from implementing previously-announced price increases, keeping spot prices unchanged in the last couple weeks at $66.00-$67.00 cwt. ($1,455-$1,477/mt or $1,320-$1,340/nt) ex-mill, with activity still heard below the range.

Import offer prices to the US are also unchanged since last week, but are expected to increase in the next couple weeks as US demand has strengthened since the start of the New Year and prices remain extremely competitive in comparison to US domestic spot prices. Korean and Taiwanese prices currently range from $49.00-$51.00 cwt. ($1,080-$1,124/mt or $980-$1,020/nt) DDP loaded truck in US Gulf ports while Turkish offer prices to the US are between $47.50-$48.50 cwt. ($1,047-$1,069/mt or $950-970/nt) DDP loaded truck in US Gulf ports.


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