Now that everyone is back at work, players within the
US domestic oil country
tubular goods (OCTG) casing market are finding their Christmas wish of rising oil prices did not come true. As of end-of-business on Tuesday,
US crude oil prices settled below $48 per barrel, bringing prices to a five-year low. Rig counts are declining at a rapid rate; recent news reports show the
US rig count has declined by 109 in the past month. And while spot market prices have not yet wavered, many say they are bracing for a wild ride. “We expect the next few months to have their fair share of bumps,” according to one Texas-based source. (Some trader sources have gone so far as to joke about possibly starting to sell some flat rolled on the side.) Those in the domestic market have also expressed their own set of concerns, especially in light of a Jan. 6 announcement by
US Steel indicating a “temporary idle” of tube mill operations in Texas and Ohio; falling oil prices were named as the culprit.
In terms of pricing, although levels reported last week continue to hold stable, many believe it is just a matter of time before the spot market starts to falter. For now,
US domestic spot prices for finished J55 ERW OCTG casing are still trending in the approximate range of $59.00-$61.00 cwt. ($1,300-$1344/mt or $1,180-$1,220/nt) ex-Midwest mill, while futures offer prices from Korean producers for unfinished J55 ERW OCTG casing are also lateral week-on-week still at $49.00-$50.00 cwt. ($49.00-$50.00 cwt. ($1,080-$1,102/mt or $980-$1,000/nt) DDP loaded truck in
US Gulf coast ports. Lastly, Taiwanese offers are also lateral since our last report a week ago and remain in the approximate range of $46.00-$47.00 cwt. ($1,014-$1,036/mt or $920-$940/nt) DDP loaded truck in
US Gulf coast ports.