The US rotary rig count may be on the rise, but sources close to SteelOrbis note that while the slow, steady gains have been helpful to demand within the US domestic and import J55 ERW oil country tubular goods (OCTG) casing markets, oversupply continues to be a problem.
“Things are starting to pick up but the supply and demand models are still out of whack,” one source said.
International news outlets continue to report that global oil markets will continue to be at a surplus for the rest of the year. In fact, the International Energy Association today said their forecast in the current month’s report suggest that the supply-demand dynamic “may not change significantly in the coming months.” The IEA also said they believe oil supply will continue to outpace demand “at least through the first half of next year.”
In terms of current offer prices for unfinished, US import OCTG casing from Korea, has remained lateral, at approximately $27.50-$29.50 cwt. ($606-$650/mt or $550-$590/nt), DDP loaded truck in US Gulf Coast ports.
Looking onshore, some sources say they have received ex-Midwest mill offers for finished J55 ERW OCTG casing in the approximate range of $51-$51 cwt. ($1,214-$1,102/mt or $1000-$1020/nt,) while others continue say it’s simply too hard to pinpoint any price, regardless as to whether it’s domestic or import, due to the still-happening fire-sales that are being offered by distribution centers that have too much inventory.
“There’s lots of stock being dumped right now, foreign and domestic, which isn’t surprising as people are staring down year-end inventory taxes in a few months.” one sources said. “The domestics are currently the worst offenders.”