CHICAGO Prices for oil
country tubular goods (OCTG) continued to slide in September as
market chatter intensified about a potential trade case against
South Korea and perhaps other OCTG-producing nations.
The long-standing rumors swirled
as OCTG imports from Korea appeared to ramp up again in
September despite falling prices and bearish market sentiment,
according to U.S. government data.
"Business sucks. Nobody is
buying," one trader said. "Everybody is waiting to see what
happens (regarding a potential trade case)."
Another trader said that his
company had decided to stop trying to chase low prices from
some Korean OCTG producers because they left little room for
profits. Still, he was hesitant to lend much sympathy to
domestic mills. "The market is bad. Welcome to the club," he
said. "I dont see much changing through possibly the
first half of next year."
That sentiment appeared to be
reflected in recent data from Tulsa, Okla.-based Pipe Logix
Inc., which showed average domestic OCTG prices at $1,811 per
ton last month, down 2.2 percent from $1,851 in August. Welded
OCTG prices averaged $1,677 per ton in September, down 1.5
percent from $1,703 the previous month, while seamless OCTG
prices slid 2.7 percent to $1,946 per ton from $1,999.
One distributor source agreed
that prices were falling and business was difficult, but he
questioned whether a trade petition would remedy domestic
Unlike past steel-market
stumbles, the current market is unlikely to be saved by a shot
in the arm from emerging markets, given global economic
uncertainty and increased capacity worldwide, he said. Worse,
the capacity spigot is unlikely to be turned off quickly, in
part because the steel industry may have "lost sight" of the
price of steel and become used to an "overpriced" level that
has been used to justify one capacity expansion after
"You cant artificially
keep prices up just because thats the way it used to be,"
the distributor source said, arguing that tags seen in the past
decade might not return even if a dumping case were brought
against Korea or another OCTG-producing nation. He brushed off
the notion of any potential trade petition as a "Band-Aid."
U.S. imports of OCTG from Korea
jumped to 55,498 tonnes in September, according to license data
from the Commerce Departments Import Administration, up
74.6 percent from 31,791 tonnes in August but down nearly 21
percent from 70,216 tonnes in July.
Overall OCTG imports reflected a
similar trend, with license data volumes totaling 254,250
tonnes in September, up 9.8 percent from 231,562 tonnes in
August but down 9.8 percent from 281,767 tonnes in July. The
gain appeared to come in part from smaller OCTG-producing
nations such as Vietnam, which was set to import 13,377 tonnes
in September, according to the license data, up more than
fivefold from 2,435 tonnes in August but down 35.8 percent from
20,826 tonnes in July.