Market players within the US domestic and import J55 ERW casing markets continue to describe conditions as “bleak.” This is especially true, sources note, due to soft rig counts and unstable domestic scrap prices.
“The market isn’t going to recover until scrap stabilizes, especially considering the rapidly declining rig count,” a source said. “With the falloff in rig count, OCTG is feeling the brunt of the price collapse.”
Another source agrees. “There is too much inventory that sellers are trying to liquidate in a down market, which is once again making it impossible to consider futures when spot prices are currently lower than replacement costs,” he said. “Until bloated inventories are depleted it will not only continue but likely accelerate into year-end.”
In terms of price points, although spot market pricing for US domestic J55 ERW OCTG casing remains in the “official range” of $50-$55 cwt. ($1,102-$1,213/mt or $1,000-$1,100/nt) ex-mill, deals at the service center level have become increasingly rampant.