When it comes to the state of the
US domestic and import J55 ERW oil country
tubular goods (OCTG), multiple sources close to SteelOrbis have said that “all you have to do is look at the rig count.”
According to the most recent data from Baker Hughes, the current number of
US rigs drilling for oil now sits at 318; this reflects a 342-rig decline from levels seen during the same reporting period last year.
“It’s tough out there,” one source said. “All you hear is people complaining about how quiet things are. We’re all pretty much dead in the water.”
Global oil barrel prices crashed to $26 per barrel in February of this year and while many believed that a price rebound that put prices back of the $40 per barrel mark, along with relative price stabilization, would help bolster
US drilling efforts and thus, OCTG consumption and demand, global oil overproduction and inventory overhang continue to pose challenges for the
US energy pipe markets.
In terms of pricing, as with last week, futures offers from both Korean and Taiwanese producers of unfinished J55 ERW OCTG casing continue to be heard in the approximate range of $27.50-$29.50 cwt. ($606-$650/mt or $550-$590/nt), DDP loaded truck in
US Gulf Coast ports, although interest in futures continues to trend weak.
May 10 data from the
US Department of Commerce, Enforcement and Compliance shows that for the month of March,
US global import tonnages of OCTG casing were recorded at 51,382 mt (census data); March 2015 import tonnages were recorded at 265,295 mt.
In terms of domestic market prices, sources close to SteelOrbis say that
US pipe mills are still pushing for higher prices due recent upticks in mills’ input costs, and are looking to raise spot market prices well well above the current average range of $42.50-$43.50 cwt. ($937-$959/mt or $850-$870/nt), ex-Midwest mill, “but there’s still so much material on the ground, that can be had at a discount, that there’s really no reason to book anything from the mills.”