The Aug. 3 Baker Hughes rig count report reflected a two-rig drop from levels seen during the last week in July; yet the modest drop may be contributing to what some SteelOrbis sources have described as being a “lull” in the market.
One source close to SteelOrbis said that despite all the talk of an anticipated energy pipe shortage that was expected to emerge during the latter part of 2018, he hasn’t seen it. “A few months ago, everyone was telling me to stock up because a shortage was coming but I haven’t seen that. In fact, l recently bought an irregular size of tubing at a lower cost than I paid the last time around.”
Another source agreed, noting that some distributors are lowering prices currently because activity, which had been strong throughout most of 2018, is starting to slow down.
“They’re lowering prices despite higher replacement costs because demand is tepid. It’s not hard to get a discount from a distributor, but the extent of the discount largely depends on who you are and how much you’re buying. It’s all over the place.”
In terms of ex-mill pricing, current US domestic J55 ERW casing is being heard in the range of $64-$69 cwt. ($1,411-$1,521/mt or $1,280-$1,380/nt), ex-mill, which reflects a $1.00 cwt. ($22/mt or $20/nt) decline from ex-mill pricing during the middle part of July.
Looking offshore, traders are indicating that Taiwanese J55 OCTG casing is still being sold to traders at $65-$66 cwt. ($1,433-$1,455/mt or $1,300-$1,320/nt) DDP loaded truck in US Gulf coast ports.