OCTG tags holding, but supply concerns linger

Dec 30, 2011 | 03:54 PM | Michael Cowden

Tags  OCTG, Pipe Logix, steel pipe, steel tube, energy tubulars, oil, natural gas, drilling Baker Hughes

TORONTO — Oil country tubular goods (OCTG) tags should hold their ground going into the new year due to high oil prices and strong drilling activity on shale plays, market sources told AMM. Renewed demand for OCTG, however, may not be enough to curb a possible oversupply at domestic and foreign mills when buyers look to restock in 2012.

Additionally, while higher-strength alloy products could see strong gains, prices for commodity carbon products could waver, sources said.

Some alloy grades, such as L and P, are in demand because they are better able to withstand higher temperatures and deeper wells with long laterals and multiples fracks in shale plays, one distributor source said. "Carbon grades, it’s a different situation. You see a lot more volatility on those items," he added.

Such comments largely echo the most recent data from Pipe Logix Inc., Tulsa, Okla., which put average OCTG prices at $1,859 per ton in December, up $1 from the previous month and 11.3 percent higher than $1,671 per ton in December 2010. ....