Falling rig counts and soft scrap pricing continue to hinder the US OCTG market. On Friday, Baker Hughes reported that three oil and two gas rigs were taken offline. The current oil rig count, which was recorded at 710, is a far cry from its peak in October 2014, when the number of active oil rigs was recorded at 1,609.
The current natural gas rig count, which was recorded at 144 as of week ending October 4, is also down substantially from its peak in 2008, when the number of active natural gas rigs was recorded at 1,606.
Soft scrap pricing, sources note, is also expected to take a toll on energy pipe prices. Weakening economic indicators throughout the US could also weigh heavily on US steel prices across the board.
And while current domestic prices are still in the official range of $50-$55 cwt. ($1,102-$1,213/mt or $1,000-$1,100/nt) ex-mill, sources close to SteelOrbis report that deal-making at the mill and service center level is rampant.