Even with strengthening demand, abundant supply continues to be a major hurdle for both US domestic and offshore oil country tubular goods (OCTG) mills. On the import side, while Korean flat rolled mills announced a $30/mt increase on prices a couple weeks ago that was expected to be translated into a similar increase in pipe prices, the increase had little effect on Korean J55 electric resistance welded (ERW) OCTG casing offer prices to the US. Korean offer prices in the range of $49.50-$51.50 cwt. ($1,091-$1,135/mt or $990-$1,030/nt) DDP loaded truck in US Gulf ports, unchanged since last week, aren't expected to change much in the next few weeks, due to stiff competition from Taiwan, Turkey and Vietnam--whose offers are about $0.50 cwt. ($11/mt or $10/nt) below Korea's; Taiwanese and Turkish offer prices are as much as $1.00 cwt. ($22/mt or $20/nt) lower.
Competition between US traders with unsold OCTG casing has also been particularly fierce. US import license data indicate that January arrivals of OCTG increased 54 percent from December to January, and February volumes are poised to be even higher. A substantial amount of the arriving imports are coming in unsold and many traders are holding hefty volumes, according to SteelOrbis sources, making the market increasingly crowded.
The abundance of import material has some US domestic buyers concerned that price-cutting could undermine the domestic OCTG market, but for the time being, demand is strong and US domestic J55 ERW OCTG casing spot prices are stable in the range of$66.00-$67.00 cwt. ($1,455-$1,477/mt or $1,320-$1,340/nt) ex-Midwest mill.