NEW YORK Some oil country
tubular goods (OCTG) market players are seeing an uptick in
demand even as prices remain in slow decline.
"Were seeing a little
uptick in demand. The extremely cold weather theyve
received from Canada all the way down to the southern U.S., in
opposition to construction, is actually good for drilling oil
and gas wells," one trader said.
An industry analyst agreed that
demand is expected to improve in the near term, in line with
recent comments made by large mills that the rig count might be
at its lowest level for the year as previously declining gas
rig numbers have stabilized while oil rigs continue to
"We certainly think the trend
will be more towards the positive side going forward," Lynn
Lupori-Gray, managing consultant at Mississauga, Ontario-based
consulting firm Hatch Ltd., told AMM.
The U.S. rig count stood at
1,761 last week, down 11.1 percent from the same time last
year, with Canadian drilling falling 5.6 percent to 662 in the
same comparison, according to data from oilfield services firm
Baker Hughes Inc. (
amm.com, Feb. 25).
While demand could pick up,
prices for most OCTG products continued to slide in February as
imports, especially from South Korea, shot up early in the
"As long as those continue to
come in as they are and without some fundamental change to
demand, prices will continue to remain low," Lupori-Gray
Average prices for all OCTG
products stood at $1,702 per short ton in February, down 1
percent from $1,720 per ton in January. This marked the 11th
consecutive drop for average OCTG prices to their lowest level
since February 2011, when prices were at $1,694 per ton. The
averages for welded and seamless OCTG both fell 1.1 percent to
$1,574 per ton and $1,830 per ton, respectively, from
prior-month levels of $1,591 per ton and $1,850 per ton,
according to data from Tulsa, Okla.-based Pipe Logix Inc.
Compared with February 2012,
overall average, welded and seamless OCTG prices for the month
all fell by around 11 percent from $1,914, $1,769 and $2,059
per ton, respectively.
Some sources were still adamant
that a trade case against South Korean producers of welded OCTG
products is looming.
"The Koreans are just sure
theyre going to get slammed with an anti-dumping suit.
The U.S. mills are calling everybody, saying theyre
definitely going to do this. Theyre not even hiding it,"
the trader said, adding that this was likely the reason for
soaring imports from the Asian country in January.
"Theyre trying to load up in advance of these looming
dumping suits. They know its going to happen."
However, Lupori-Gray expressed
caution, saying there was "no clear direction" for the case,
which has been a subject of industry discussion for years (
amm.com, March 21, 2010).
U.S. imports of welded OCTG from
South Korea totaled 91,170 tonnes in January, according to
preliminary data from the U.S. Census Bureau, more than triple
the 26,645 tonnes imported from the nation in December.
Imports of line pipe from the
Asian nation jumped to 78,270 tonnes, more than double the
36,668 tonnes brought in during December.