The US domestic energy pipe markets are still getting hammered, multiple sources close to SteelOrbis have confirmed, noting that prices have “taken a virtual nose dive.” Yet despite unprecedented pricing levels, “orders are nonexistent.”
Lagging activity isn’t exactly a surprise, another source added, pointing to last week’s rig count report from Baker Hughes. As of Friday, it was reported that the total rotary rig count declined by 17, to a combined oil and gas rig tally of 284. Last week’s levels reflect a roughly 71% year-over-year decline.
Current oil prices aren’t helping either. For example, in January, Brent Crude was being traded at approximately $64 per barrel, before dropping to less than $19 for a period of time in April. And while current prices have experienced a rebound, due to renewed import activity from China, Goldman Sachs is predicting that oil prices are will fall again before the year is over.
“The mills are practically giving pipe away,” a source said. “But at this point it doesn’t matter what the price is, because demand just isn’t there.”
Current pricing for stock API-X52 is being heard at approximately $42.50 cwt. ($937/mt or $850/nt), ex-mill, although some sources have reported getting offers “at slightly lower price points.” What’s most interesting, sources note, is that at current, domestic material is priced lower that Mexican material, which is being heard at a price closer to $45.00 cwt. ($992/mt or $900/nt), FOB Texas.
Multiple other sources have confirmed that stock domestic J55 ERW OCTG casing is being traded at or below $45.00 cwt. ($992/mt or $900/nt), ex-mill, “but even at that level, there is very little activity,” a source said. “There is literally no good news in the energy pipe business right now.”