Last week, Luxembourg-based steel pipe producer Tenaris SA announced it would temporarily suspend operations at its Conroe, Texas plant. A total of 230 jobs will be cut as a result, they said, and those cuts are to be permanent.
This marks just another round of “trimming the fat” for US domestic energy pipe producers, with some going as far as to equate current market conditions as being an “oilpocalypse” of sorts. Prices, while steady week-on-week are trending soft; order activity remains light and inventories are still healthy enough that no one is on the edge of an “emergent need-to-buy-now” situation. Some, however, feel that inventories could start to thin into the mid-to-late second quarter, and that a resurgence in buying could prove to be a small bright spot on the horizon. A full recovery, however, is not expected to come any time soon.
US domestic spot prices for finished J55 ERW OCTG have remained sideways in the past seven days, still at approximately $59.00-$61.00 cwt. ($1,300-$1344/mt or $1,180-$1,220/nt) ex-Midwest mill, while offer prices for unfinished J55 ERW OCTG casing from Korean producers have held at approximately $47.50-$49.00 cwt. ($1,047-$1,080/mt or $950-$980/nt); prices for finished J55 ERW OCTG casing continue to trend at approximately $54.00 cwt. ($1,191/mt or $1,080/nt), both DDP loaded truck in US Gulf coast ports. Lastly, Taiwanese offer prices for unfinished J55 ERW OCTG casing are sideways week-on-week, at $44.00-$45.00 cwt. ($970-$992/mt or $880-$900/nt) DDP loaded truck in US Gulf coast ports, but both service center and trader sources continue to report that “all numbers are flexible.”