US OCTG market struggles with rampant deal-making

Wednesday, 22 May 2013 23:30:39 (GMT+3)   |   San Diego
Import offer prices for unfinished J55 electric resistance welded (ERW) oil country tubular goods (OCTG) casing from Korea, Taiwan, India and Vietnam have remained stable in the last week. Prices from Vietnam and India to the US are still between $44.00-$44.50 cwt. ($970-$981/mt or $880-$890/nt) DDP loaded truck in US Gulf ports whereas import sales prices from Korea and Taiwan to the US can be found in the approximate range of $45.00-$45.50 cwt. ($992-$1,003/mt or $900-$910/nt) DDP loaded truck in US Gulf ports. Even though offer prices from all four sources have been fairly similar in recent months, industry insiders point out that Korean mills continue to be the leader when it comes to incoming OCTG imports arriving in the  US. US Steel Import Monitoring and Analysis (SIMA) data show that Korea was the largest offshore supplier for OCTG in the US in April (69,704 mt based on license data). This is nearly 3.5 times more than tonnages arriving from Turkey (20,090 mt) during that same time period. Traders are still reluctant to book speculative tonnages, but this is less about trade-case rumors and more about keeping tightly managed inventories. As in previous weeks, deals as much as $3.00 cwt. ($66/mt or $60/nt) below the most common transaction range are available for buyers interested in booking larger tonnages.

In the US domestic market, the past week’s trend has held at status quo. The most commonly reported spot price range for finished J55 ERW OCTG casing is unchanged in the past week, still at $60.00-$61.00 cwt. ($1,323-$1,345/mt or $1,200-$1,220/nt) ex-Midwest mill, although buyers are able to negotiate deals as much as $3.00 cwt. below that range for larger orders. Customers, though, are only purchasing what they need in order to fill gaps in their inventory. 


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