NEW YORK Prices for oil country tubular goods (OCTG) have continued their slow decline in a well-supplied market that has seen only cautious buying so far this year, market sources told AMM.
"Across the board, the industry is suffering from lack of demand and also fear of buying something, because if I buy today maybe I could have bought it cheaper in two or three weeks time," one trader said. "People are pushing the risk as far away from them as they can."
A second trader, who reported a slight pickup in demand for January compared with a "painfully slow" fourth quarter, said that imported material also was keeping prices low. "We still have large amounts of inventory in and around the Gulf Coast particularly, and the incoming (material) is not allowing (it) to drop as quickly as it could," he said.
Average prices for OCTG declined 0.6 percent to $1,720 per ton in January from $1,731 the previous month, according to the latest figures from Tulsa, Okla.-based Pipe Logix Inc. Average seamless OCTG prices dropped 0.3 percent to $1,850 per ton from $1,856, while average welded OCTG tags fell 0.9 percent to $1,591 per ton from $1,605.
Industry players still anticipate a trade complaint being filed against South Korean producers of welded OCTG, which could help prices recover (amm.com, Jan. 16).
"Even the Koreans are a little more believing that this is closer. In the past, theyve really poo-pooed it: Its not going to happen and we arent concerned," the second trader said.
The first trader agreed, saying that Korean mills had indicated they were on a "hit list" for a trade case.
The threat has not stopped Korean imports from entering the domestic market, however. U.S. Census Bureau license data as of Jan. 29 indicates that the country was shipping 97,792 tonnes to the United States in January, the highest level in more than a year and well above preliminary import figures of 18,955 tonnes in December.
"You look at these statistics on the Koreans, and theyre not exactly being shy," the second trader said.
License data shows an average value of $971 per tonne for the product from Korea, 14 percent lower than $1,129 in the same month last year.
The U.S. drill rig count climbed by four to 1,753 recently, although thats still down 255 from the same period last year, according to Houston-based oilfield services firm Baker Hughes Inc.