The US domestic oil country tubular goods (OCTG) market is feeling downward pressure as a result of falling domestic flat rolled prices. After dropping $1.00 cwt. ($22/mt or $20/nt) a week ago, J55 electric resistance welded (ERW) OCTG casing spot prices are unchanged at $66.00-$67.00 cwt. ($1,455-$1,477/mt or $1,320-$1,340/nt) ex-Midwest mill, but industry insiders continue to inform SteelOrbis of deals being placed up to $2.00 cwt. ($44/mt or $40/nt) under the range. So although spot prices have not moved in the last week, as the lower-priced deals become more prevalent they are likely to result in a drop of at least another $1.00 cwt. in overall spot prices in the not-so-distant future. Competition is also weighing down on the domestic market as capacity remains high and welded OCTG products are "already significantly overproduced" according to one Midwest buyer.
Competition in the import J55 ERW OCTG casing market is also having a negative effect on prices. As mentioned in previous reports, many offshore sources are competing for US business and have been increasingly willing to make deals in order to keep or grow their market share. This dynamic is especially true for Korea and Vietnam. Korea is still the main go-to source of imported OCTG in the US but with Korean prices $1.00 cwt. above Vietnamese prices in the US of $54.00-$55.00 cwt. ($1,190-$1,213/mt or $1,080-$1,100/nt) DDP loaded truck in US Gulf ports, import orders being placed with Vietnamese mills have been increasing as of late. Other import offers are coming from Taiwan and Turkey, whose sales prices in the US are both approximately $55.50-$56.50 cwt. ($1,224-$1,246/mt or $1,110-$1,330/nt) DDP loaded truck in US Gulf ports.