Rapidly rising US rig counts and firm order activity are sustaining US domestic spot prices for oil country tubular goods (OCTG) casing and line pipe.
Sources indicate that most buyers of energy pipe tubulars are keeping inventory levels balanced, and therefore continue to make purchases on a regular basis, a major factor keeping US domestic J55 electric resistance welded (ERW) OCTG casing spot prices in the range of $66.00-$67.00 cwt. ($1,455-$1,477/mt or $1,320-$1,340/nt) ex-Midwest mill, not only unchanged from last week, but for nearly the third straight month. Domestic API X42 ERW line pipe spot prices have been slightly less consistent over the past couple months, but haven't moved in the last week either, and are still $65.50-$66.50 cwt. ($1,444-$1,466/mt or $1,310-$1,330/nt) ex-Midwest mill.
In addition to buyers maintaining tight control of their inventories, rapidly rising US rig counts are also keeping US domestic demand levels robust. According to data from Baker Hughes, after an eight rig count drop at the end of July, drilling activity so far in August is quickly growing. US rig counts were up 12 in the first week of August, and another 39 last week, driven by a 24-rig jump in rigs drilling for oil. Additionally, the 51-rig count increase in just the first two weeks of August is already more than twice the total number of rigs gained in all of July (22).
Activity is steady on the import side as well. Most orders of import J55 ERW OCTG casing are being placed with Korean mills in the range of $52.00-$53.00 cwt. ($1,146-$1,168/mt or $1,040-$1,060/nt) DDP loaded truck in US Gulf ports--unchanged from last week. Taiwanese prices are within a similar range while Vietnamese prices are about $1.00 cwt. lower in the $51.00-$52.00 cwt. ($1,124-$1,146/mt or $1,020-$1,040/nt) DDP loaded truck in US Gulf ports range. J55 ERW OCTG casing prices from Turkey have stayed neutral in the last week as well and are about $0.50 cwt. ($11/mt or $10/nt) higher than Vietnamese prices.
Line pipe import activity in the US is a bit lighter, but consistent nonetheless. The most competitive API X42 ERW line pipe prices are coming from Taiwan and Korea, still in the range of $48.00-$49.00 cwt. ($1,058-$1,080/mt or $960-$980/nt) DDP loaded truck in US Gulf ports, unchanged since last week.