Continued high US domestic oil country tubular goods (OCTG) casing and line pipe availability coupled with falling raw material costs have translated into a decline in spot prices.
Deal-making below US domestic market prices for OCTG casing and line pipe has been prevalent for a couple months now, but with order activity slowing somewhat as a result of many distributors keeping a watchful eye on year-end inventory levels, those sporadic low prices have now become the norm. As a result, US domestic J55 electric resistance welded (ERW) OCTG casing spot prices have fallen $1.00 cwt. ($22/mt or $20/nt) in the last week to $66.00-$67.00 cwt. ($1,455-$1,477/mt or $1,320-$1,340/nt) ex-Midwest mill, after increasing just a couple weeks ago, and sources tell SteelOrbis that larger orders are being placed closer to $65.00 cwt. ($1,433/mt or $1,300/nt) ex-Midwest and even below.
The US domestic line pipe market has experienced a similar drop of about $1.00 cwt. in the last week, bringing spot prices to approximately $63.50-$64.50 cwt. ($1,400-$1,422/mt or $1,270-$1,290/nt) ex-mill for API X42 ERW line pipe, and like with welded OCTG spot prices, deals below the range are not unheard of. While demand levels stemming from drilling activity are holding steady, the welded pipe market remains under downward pressure due to a combination of excessive domestic OCTG and line pipe availability and lead times only about five to seven weeks, buyers keeping lean inventories, and domestic hot rolled coil (HRC) spot prices falling about $2.00 cwt. ($44/mt or $40/nt) in the last three weeks.
On the other hand, import OCTG and line pipe prices in the US are unchanged, although at least one import source has been trying to raise its prices. After Korean J55 ERW OCTG casing prices in the US rose by about $1.00 cwt. in late September, Korean mills have been trying to push through a similar increase on line pipe offers to the US, citing higher domestic HRC prices. But with demand for imported line pipe not particularly robust at the moment, such attempts haven't had any success, and Korean API X42 ERW line pipe prices will remain in the range of $49.00-$50.00 cwt. ($1,080-$1,102/mt or $980-$1,000/nt) DDP loaded truck in US Gulf ports. Likewise, Indian prices are still $51.00-$52.00 cwt. ($1,124-$1,146/mt or $1,020-$1,040/nt) DDP loaded truck in US Gulf ports, reflecting no change from last week.
Import J55 OCTG casing prices in the US are also stable from last week and with so many offshore OCTG sources vying for dominance in the US market, import prices remain largely similar. Most import OCTG orders in the US are being placed with Korean mills between $55.00-56.00 cwt. ($1,213-$1,235/mt or $1,100-$1,120/nt) DDP loaded truck in US Gulf ports, while Taiwanese and Turkish prices in the US are $55.50-$56.50 cwt. ($1,224-$1,246/mt or $1,110-$1,330/nt) DDP loaded truck in US Gulf ports. The lowest prices currently available in the US market are coming from Vietnam in the range of $54.00-$55.00 cwt. ($1,190-$1,213/mt or $1,080-$1,100/nt) DDP loaded truck in US Gulf ports, unchanged from two weeks ago.