HOUSTON Energy tubular
prices are expected to pick up in the second half of this year
as consumers come back into the market to replenish
inventories, according to TMK Ipsco chairman Piotr
We think some clients
spent their 2012 budget early and therefore there was a drop in
rigs, distributor desires (in order) to reduce inventories for
year end tax reasons (and the) drop in demand for pipe
consequently (led to) downward pricing pressure in the second
half of 2012. We anticipate slight improvement in pricing in
the second half of 2013 as the overall economy improves, rig
count increases, he told AMM on the sidelines of
its 6th annual Tube and Pipe conference in Houston.
Galitzine cautioned domestic producers against relying on a
possible trade case against imported oil country tubular goods
(OCTG) to improve pricing (
amm.com, Jan. 16).
"Personally, Ive always
been a free marketer and trade cases are a last resort. It
behooves all of us to become more efficient and cut costs.
Thats where battles are won," Galitzine said.
Demand for OCTG is expected to
remain robust in 2013 even in light of a slowing rig count, as
intensity of use has increased.
"The drilling rigs that
were talking about today are worth two and a half of your
grandfathers drilling rigs. We think the appetite for the
tonnage is there," Galitzine said, with Houston-based TMK Ipsco
estimating apparent demand for OCTG at about 6.5 million tons
Galitzine cautioned against a
recent stance by some domestic manufacturers in calling for a
curb on exports of liquefied natural gas (LNG), which has the
potential to improve prices and subsequently exploration.
"I think, as always, you have to
be careful of the greater interest being subordinated by narrow
local interests," he said.